Sweeping Changes to Virginia’s UIM Statute

A broad overhaul of Virginia Code § 38.2-2206 (Virginia’s Underinsured Motorist Statute) will result in new rights and responsibilities for claimants, tortfeasors, liability carriers and underinsured motorist carriers in settling claims.

The most significant of these changes is that a liability insurer and a plaintiff may settle a claim and release the tortfeasor while still allowing the plaintiff to proceed against the UIM insurer.  The statute also may shift the duty to defend entirely to the UIM insurer while extinguishing its subrogation rights, resulting in increased costs to an underinsured motorist carrier with no ability to recover from the tortfeasor.

The changes will apply only to policies issued on or after January 1, 2016, meaning that Virginia will operate under two statutory schemes during a “run-off” period.  Policies issued after January 1, 2016 will be handled much differently than in the past, including new notice requirements, new duties by the tortfeasor to the underinsured motorist carrier, and increased vigilance on the part of all insurers to ensure that a claim is handled properly.

Harman, Claytor, Corrigan and Wellman partner Jon A. Nichols published an extensive review of the statutory changes in the Virginia Association of Defense Attorneys’ Journal of Civil Litigation(Spring 2016).  Click here for the complete article.

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Please contact any of our attorneys if you have any questions or would like to discuss this issue in greater detail.