Insurers in Virginia will now pay double if underinsured and uninsured (UM/UIM) motor vehicle claim denials or nonpayments are proven to be in bad faith.

Effective July 1, amendments to §§ 8.01-66.1 state, in part, “the company shall be liable to the insured in an amount double the amount otherwise due and payable under the provisions of the insured’s policy of motor vehicle insurance of the judgment, plus interest from 30 days after the date the claim was submitted in writing to the insurer or its authorized agent, together with reasonable attorney’s attorney fees and expenses.”

Under the changes, an insurance company would act in bad faith if it “denies, refuses, fails to pay, or fails to make a timely and reasonable settlement offer” under the policy in question.

The amendments added property damage, medical expense benefits, and loss of income benefit claims to the requirements and removed a monetary stipulation that claims must be for $3,500 or more. However, insurers would only pay up to $500,000 if found to be in bad faith.

Before, according to Northern Virginia Injury Law News, many Virginians had to fight for fair benefits in court.

“The changes to Virginia Code § 8.01-66.1 come after years of advocacy and efforts within the government to protect people with car insurance and hold carriers accountable for paying UM/UIM claims,” the article states. “Virginia’s new bad faith law is expected to motivate insurance carriers to provide more timely responses and offer fair settlements for UM/UIM claims submitted by their policyholders.

“…insurance companies were able to delay payments and deny claims from their own insured making an underinsured or uninsured motorist claim without penalty or incentive. The injured were forced to pay out of pocket for medical treatments, with many missing weeks or more of work as they recovered — all while their insurer withheld UM/UIM settlements until a court judgment specified the value of their claim.”

During testimony on the bill at the committee’s Feb. 9 meeting, Mark Dix, on behalf of the Virginia Trial Lawyers Association, said the bill is the answer to a 2017 case that changed insurance law in the state, Manu v. GEICO.

Ebenezer Manu filed a complaint against GEICO alleging that the insurer violated Virginia law by acting in bad faith when it refused to pay his uninsured motorist bodily injury claim.

The case was dismissed in Circuit Court, leaving Manu without a remedy against GEICO, which the Supreme Court affirmed.

The changes to the law apply to motor vehicle accident personal injury or wrongful death claims that occurred on July 1, 2024, or after.

Also effective July 1, Virginians must carry automobile insurance, according to a law signed in 2023.

SB 951 repealed the option motorists had to register uninsured vehicles and pay an annual $500 fee.

Effective Jan. 1, 2025, liability insurance coverage requirements in Virginia for injury or death of one person will increase from $30,000 to $50,000; injury or death of two or more people from $60,000 to $100,000 and property damage from $20,000 to $25,000.

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