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Virginia’s 2023 Reforms for Uninsured Motorists Coverage

Laws in the Commonwealth of Virginia can change just like in any other state, and you may be unaware of important changes that can affect you personally. In fact, a recent change has already gone into effect that impacts all licensed drivers in the state. The new law modifies how uninsured motorist coverage and UIM policies work, so it is essential that you are aware of the changes if you ever need to make an insurance claim.

If you are concerned about the status of your current auto insurance coverage or are seeking to get coverage, it is important to know exactly what the implications of the new law are. Fortunately, the experienced accident attorneys at Montagna Law are happy to help with Virginia’s ever-evolving legal landscape. Get in touch with our team for a free consultation and legal advice to get started.

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What Is the New Virginia Law on Uninsured Motorist Coverage?

On July 1, 2023, a new law went into effect that changed the way uninsured motorist insurance works in the state of Virginia. Uninsured and underinsured motorist coverage can now be stacked and added to liability insurance coverage. This could lead to an even bigger payout for the injured person in the event of an accident under certain circumstances.

How This Law Benefits Virginia Drivers

With this new law in place, Virginia drivers may be able to get more insurance coverage applied to an accident at once. While this does nothing to increase the coverage from a single source, it allows claimants to collect compensation from multiple sources, which decreases the likelihood of policy limits getting in the way of covering your medical expenses.

Example of the Old Law vs. the New Law

Imagine that you got into an accident with an at-fault driver who has $100,000 of liability coverage while you have $100,000 worth of uninsured motorist coverage. Because the coverages stack, you may be able to collect from both the liability policy and the UM policy, granting you a total of $200,000 in compensation. Before the new law, collecting from both was not possible.

Under the old law, you could only collect what was left over from any other kind of coverage. For example, imagine that you have $100,000 worth of underinsured motorist coverage but are only able to recover $25,000 from the other motorist. Under the old law, you would only be able to get a maximum of $75,000 from the underinsured policy rather than the full $100,000 coverage amount.

Will This New Law Be Automatically Applied to My Coverage?

reforming uninsured motorists coverage with a lawyer

The application of this new law is automatic, though it does matter when your policy went into effect. If it went into effect after July 1, 2023, you will automatically have this benefit. If your policy dates back to before that date, it will not go into effect until your policy is renewed. Note that all insurance companies are different, so you may want to double-check with them to make sure you get this benefit on your specific policy.

What Is UM/UIM Coverage in Virginia?

Uninsured motorist coverage, or UM coverage, is car insurance that is designed to cover you if the other party involved in an accident does not have insurance of their own. Meanwhile, underinsured motorist insurance, or UIM, is utilized when the other party’s liability insurance does not reach the coverage limit you need for damages like bodily injuries and property damage sustained in the accident.

Typically, the not-at-fault party relies on the at-fault party’s insurance to cover the damages, so UM/UIM coverage is designed to fill in the gaps should the at-fault party not have the proper insurance to cover all the damages. For example, if you suffered $50,000 worth of damages in an accident and the at-fault party only has $30,000 worth of insurance coverage, you could pursue your own underinsured motorist coverage for the remaining $20,000. For further information, see Virginia’s uninsured motorist legal code.

What Is the Minimum Amount of Uninsured Motorist Coverage in Virginia?

In Virginia, there is technically no minimum amount of uninsured motorist coverage required, but that only applies to drivers who opt out of being insured. In those cases, drivers will have to pay an uninsured motorist fee. If you do opt for insurance coverage, however, there are minimum coverage limits you are legally required to purchase, and they are as follows:

  • Bodily injury liability coverage — $30,000
  • Underinsured coverage — $30,000
  • Uninsured coverage — $30,000

Insurance Companies May Try to Get You to Opt Out of UM Coverage

As a disclaimer, it is possible to opt out of this benefit, and your insurance company may even encourage you to do so. They may claim that if you opt out, your policy rates will drop. Keep in mind that insurance companies are for-profit enterprises, and they would not offer a discount if it did not mean more money in their pocket in the end. The benefits of this new law tend to far outweigh any drop in premiums that the company may offer.

Any policy issued or renewed after July 1, 2023, is required to come with a notification to the named insured that underinsured motorist coverage has been increased to the full limit regardless of how much is available under any insurance policy held by the at-fault party. You have the right to refuse this change, but you do not have to.

If you are ever in an accident that involves an underinsured or uninsured motorist, the potential payout from this extra coverage is far more significant than the savings you would achieve even after months upon months of lower premiums. Insurance companies know this, which is why they often try to convince customers to opt out. If your premium dropped $20 per month, for example, and you lost out on the opportunity to collect an extra $100,000 from an accident case, you would need to discover the fountain of youth to live long enough for that to be worth it.

Imagine you are in an accident and suffer $125,000 worth of damages as determined by a court. The at-fault party has just $25,000 worth of liability coverage, so the rest would have to be covered by your UIM coverage. If you have $100,000 worth of UIM coverage, you may think you are good for the full amount. The old law, however, would only entitle you to $75,000 because the $25,000 of coverage from the at-fault party would be deducted from your $100,000 coverage limit rather than your $125,000 worth of damages. Under the new law, you would be able to receive the full $100,000.

Keep in mind that this new law can be especially helpful in hit-and-run cases along with other types of accidents with uninsured drivers or drivers without enough insurance to begin with. The far-reaching benefits for drivers are the reason this law was passed in the first place and why insurance carriers were so opposed to it. Do not let them convince you to opt out of the benefits of this new law that can only help to put more money in your hands.

Were You Recently in an Accident and Wondering How These Laws Impact You?

a man and woman arguing after a rear end accident

These new laws may have already impacted your insurance policy even if you were not explicitly made aware of it. The details of insurance policies can be complex and difficult to understand, and insurers prefer this because it means you are less likely to take advantage of what these policies can offer. Unfortunately for them, the Montagna Law firm operates to help people actually get the benefits of the insurance policies for which they pay. If you are in the process of a Virginia personal injury claim and are unsure of how to proceed while medical bills are increasing, Montagna Law is happy to help, beginning with a free consultation.

Keep Your UM and Stack the Coverage

If you live in the Hampton Roads area of Virginia and frequent the streets of Virginia Beach, Norfolk, Chesapeake, Portsmouth, or Suffolk, you can only benefit from having this expanded insurance coverage. Make sure that your UM/UIM coverage stacks with liability coverage to help get more of a payout in the event of a motor vehicle accident. If you have already been involved in a car accident, nothing will help you get the most out of the process like assistance from an experienced Virginia personal injury attorney. Get in touch with our team at 877-622-8100 or fill out our online contact form to set up a free case review today.

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