BMHJ Blog: Legal Information, Resources, & News: Legislative Updates

The 2010 Amendment to the Virginia UM/UIM Statute

May 18th, 2010
By: Bancroft McGavin Horvath & Judkins

The Virginia General Assembly added a new section to the Virginia UM/UIM statute, Va. Code Section 38.2-2206 during its most recent session which was designed to create a mechanism to allow liability carriers to shift the costs of the defense to the UIM carrier if certain criteria is met. First, the liability insurer must make an “irrevocable” offer in writing to pay its bodily injury or property damage limits; second, written notice must be given to the UIM carrier; third, to be effective, the UIM carrier who gets the notice must have been served in accordance with the statute; fourth, 60 days after the written notice is provided to the UIM carrier, the liability insurer is relieved of defense costs incurred thereafter, which includes expenses and “reasonable and necessary” attorney’s fees; fifth, the UIM carrier must reimburse the liability insurer for costs to defend to the date the UIM carrier offers its limits, or presumably settles. The amended statute requires that the liability carrier retains the duty to defend. It also states that in the event of either a jury verdict returned in an amount equal to or less than the total liability coverage available for payment or a dispositive ruling dismissing plaintiff’s complaint the new subsection of the statute does not apply. So, how¬†will this new statute impact the insurance industry?

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Disclaimer

This blog and the information provided has been prepared by Bancroft, McGavin, Horvath & Judkins, P.C. (“BMHJ”) for information purposes only and is not intended nor to be construed as legal advice. This blog may contain the opinions of the members and associates of this firm on various legal issues and is not legal advice. Read More