A change in insurance law occurred last year that is beginning to make a big difference in auto injury cases. In 2023, the General Assembly passed a new law to help increase available insurance coverage for accident victims. The new law targets uninsured and underinsured motorist coverage (UM/UIM) for all Virginia drivers. This change applies to all insurance policies issued or renewed after July 1, 2023. With the new law having been in effect for more than a year, the benefits of this are starting to show in settlements for car crash cases. Here is how it works.
When you purchase car insurance in Virginia, you are issued a “Declarations Page” showing the types and amounts of coverage that you purchased. It might look something like this:
Bodily Injury Liability $100,000/$200,000
Property Damage Liability $50,000
Uninsured Motorists $100,000/$200,000
Collision $50,000
Medical Expense Benefits $5,000
“Bodily Injury Liability” provides coverage to others in the event that you injure someone on the roadways. “Property Damage Liability” covers damage that you cause to property (i.e., another vehicle) if you crash into someone or something. “Uninsured Motorists,” which we will discuss in more detail below, provides coverage to you if you are injured by someone who does not have auto insurance or who does not have enough coverage. “Collision” covers damage that you cause to your own vehicle (e.g., when your teenage son accidentally totals the family car). “Medical Expense Benefits” is coverage available to pay any out-of-pocket expenses you incur for medical treatment you receive from a car accident (e.g., co-pays, deductibles, etc. for your doctor visits).
As an aside, the numbers split ($100,000/$200,000) means “each person/each accident.” If you were to cause an accident and hurt someone, that one person would never receive more than $100,000 from your policy. If you hit a bus full of people, your insurance company would pay no more than $200,000 for the entire fracas. In other words, all the people in the bus who were injured would have to carve up and divide out the available $200,000 from your policy.
The new change in the law deals with Uninsured or Underinsured Motorist coverage, sometimes referred to as “UIM coverage.” Prior to July 1, 2023, you could only recover under your own policy if your UIM coverage exceeded the available coverage for the at-fault driver. Under the old law, policies issued or renewed before July 1, 2023 calculated the available UIM coverage by subtracting the at-fault driver’s liability coverage from your coverage. This resulted in the at-fault driver receiving a credit. Here is how the old law worked:
David crashes into Jane.
David has $100,000 in liability coverage.
Jane has $100,000 in UIM coverage under her policy.
Because Jane’s policy does not exceed David, Jane could not “stack” the policies and collect under both policies. Under the old law, Jane would only have $100,000 of available coverage from David’s policy to compensate her.
Under the new law, the UIM policy (the injured person’s insurance carrier) can no longer subtract the at-fault driver’s available coverage from the UIM coverage. This allows the injured person to “stack” his or her own coverage on top of the coverage from the negligent driver. Using the same example, here is how the new law works:
David crashes into Jane.
David has $100,000 in liability coverage.
Jane has $100,000 in UIM coverage under her policy.
Jane can now “stack” these policies and collect under both the liability policy and her own UIM coverage. There will now be $200,000 of available coverage ($100,000 from David’s policy and $100,000 from Jane’s own policy through her UIM coverage).
As you can see, the new law results in much more money being available for accident victims. Also, this change is automatic — meaning, unless you opt out, this benefit will exist for any policy renewed or issued after July 1, 2023. My recommendation is that you politely decline any insurance salesman who tells you that your policy rates will drop if you “opt out” of this coverage. My view is that any decrease in your premium would be minimal compared with the coverage you have lost, and not worth it. Using the above example, if Jane had “opted out” of the new law, she would have been limited to only $100,000 instead of $200,000. That’s a big swing in difference. And, when you’ve been injured, money makes a difference.
