An Act to amend and reenact §§ 8.01-66.1:1 and 38.2-2206 of the Code of Virginia, relating to underinsured motorist benefits; actions against released defendant.
HB107 amends Virginia law governing uninsured and underinsured motorist coverage, with a particular focus on what happens when an injured person settles with a defendant and later seeks underinsured motorist benefits. The bill revises § 8.01-66.1:1 to limit an underinsured motorist benefits insurer’s right of subrogation against a released defendant unless the underinsured motorist failed to reasonably cooperate in the defense of the lawsuit. It also creates a rebuttable presumption of noncooperation if the person does not attend a subpoenaed deposition or trial, assist with written discovery, meet with defense counsel after notice, or keep counsel informed of address changes.
The bill further requires the insurer seeking cooperation to pay the reasonable costs of securing that cooperation, including travel expenses when the insured lives more than 100 miles from the deposition or trial location. If the insured is found to have cooperated, or to have acted reasonably and in good faith, the court may award the insured defense costs and attorney fees in the subrogation action. In addition, the bill amends § 38.2-2206, the state’s uninsured motorist statute, to preserve and restate the framework for uninsured and underinsured motorist coverage in auto policies, including the relationship between coverage limits, liability limits, and any insured election to reduce underinsured motorist payments by available liability coverage.
The bill’s impact is primarily on auto insurance litigation and claims handling in Virginia. It narrows insurer subrogation rights in cases involving settlements with released defendants and clarifies the cooperation duties of insureds who are involved in underinsured motorist claims. It also affects insurers, insured drivers, defense counsel, and courts by setting standards for cooperation, shifting certain costs to insurers, and authorizing fee awards in some circumstances.
The general sentiment reflected by the bill’s enactment is neutral to supportive, as there is no recorded committee transcript or vote history showing opposition. The measure was enacted as Chapter 64 and appears to have moved through the process without documented controversy in the available materials.
The main point of contention embedded in the text is the balance between insurer recovery rights and the burden placed on injured motorists to assist in litigation after a settlement. Insurers may view the bill as limiting subrogation and increasing their costs, while policyholders and plaintiff-side interests may see it as protecting injured people from unfair insurer recovery efforts and ensuring they are not penalized when they cooperate in good faith.
HB107 amends §§ 8.01-66.1:1 and 38.2-2206 of the Code of Virginia to change how underinsured motorist benefits interact with settlements, released defendants, and insurer subrogation rights. It limits an underinsured motorist benefits insurer’s ability to pursue subrogation against a defendant who settled with the insured unless the insured failed to reasonably cooperate, and it establishes cooperation standards, cost-shifting for cooperation efforts, and possible attorney-fee awards. The bill also restates and preserves the statutory structure for uninsured and underinsured motorist coverage in automobile policies, affecting insurers, insureds, and litigation over motor vehicle accidents.
The available record suggests a generally favorable or at least noncontroversial reception. There are no committee transcripts or recorded votes in the provided materials indicating significant opposition, and the bill was enacted into law as Chapter 64. The absence of recorded dissent suggests the measure likely moved as a technical or targeted insurance-law adjustment rather than a broadly contested policy change.
The central policy tension is between protecting insurers’ subrogation interests and protecting insured motorists from being forced to bear the costs and burdens of cooperation after a settlement. Insurers may object to the restriction on subrogation and the requirement that they pay cooperation-related expenses, including travel costs and potentially attorney fees. On the other hand, insureds and their advocates may support the bill’s good-faith cooperation standard and the presumption rebuttal, which prevent automatic loss of protections when a claimant makes reasonable efforts to assist in the defense.