When Does the New Virginia UIM Settlement Law Take Effect?
The new Virginia UIM settlement procedure law applies “to policies issued or renewed on or after January 1, 2016.” The new law doesn’t automatically take effect on January 1, 2016. The new law only applies to motor vehicle accidents after January 1, 2016 where the policy was issued or renewed in 2016 before the accident.
For example, David, insured with Geico, negligently crashes into Peter’s car injuring Peter on May 5, 2016. David’s Geico policy renewed for 6 months, a day after the crash, on May 6, 2016. Since the defendant’s liability policy renewed after the collision, the new law does not apply – the old law is still in effect.
If the old law is still in effect, the injured person can not settle his car accident case with the other driver's liability insurance company, Geico in this example, without the consent of the underinsured motorist (UIM) insurance company. If the injured person does, her UIM benefits are lost. Under the new law, the injured person is allowed to settle with the other driver's liability insurance company for its available policy limits without prejudice to her UIM benefits. She does not need the consent of her UIM carrier.
Caution: In every case, it is vitally important for the plaintiff’s lawyer to find the date in 2016 when the defendant’s liability policy was issued or renewed in order to determine if the old or new UIM settlement procedure law applies to the case. After a policy limits offer is made, but before signing the liability release, it is important to obtain a copy of the defendant’s declarations page to verify the date the policy was issued or renewed as well as the policy limits. If the adjuster gives you the wrong date and you erroneously sign a liability release where the old law applies, you could destroy your client’s UIM claim . . . so exercise caution and find the date and verify the date. For auto accidents that occur in 2016, the old law could be in effect through 2020. In some cases, joint tortfeasors, for example, both the old and the new law could apply at the same time.Free Consultation with Gerald Schwartz
Gerald Schwartz has been called “the man to see” when it comes to underinsured motorist (UIM) coverage. To consult directly with Gerald Schwartz, not an associate, call 1-800-423-0055.