A BILL to amend and reenact §§ 38.2-517, 46.2-770, 46.2-771, 46.2-772, and 58.1-3524 of the Code of Virginia, relating to motor vehicles; insurance, highway use fee, and tangible personal property tax relief; application to certain vehicles.
HB1281 would amend Virginia law in three main areas tied to motor vehicles. First, it expands the state’s unfair insurance settlement practices rules by prohibiting insurers from steering claimants to designated repair or replacement facilities without required disclosures, banning coercion, requiring disclosure of any insurer financial interest in a recommended repair shop, and prohibiting “capping” of paint and materials reimbursement. It also clarifies that insurers may explain coverage obligations and may maintain repair networks, and it makes insurers responsible for violations by third-party representatives.
Second, the bill changes the highway use fee framework for alternative fuel vehicles, electric motor vehicles, and fuel-efficient vehicles. It keeps the annual fee on those vehicles, defines the affected vehicle categories, sets the fee calculation methodology, requires annual updates, and provides a process to contest incorrect assessments. It also preserves existing exemptions for certain vehicles, including motorcycles, heavy vehicles, government vehicles, and International Registration Plan vehicles, while continuing the special $25 fee for low-speed vehicles and exempting vehicles enrolled in the mileage-based user fee program. Third, the bill amends the tangible personal property tax relief provisions referenced in the caption, indicating related tax treatment changes for certain vehicles.
The bill’s practical impact would be to tighten consumer protections in auto insurance claims and to adjust how Virginia recovers road-use costs from owners of electric, alternative fuel, and fuel-efficient vehicles. It would affect insurers, repair facilities, claimants, and vehicle owners, especially those with newer or more efficient vehicles that are subject to the highway use fee. It would also interact with local and state vehicle tax administration through the referenced property tax relief statute.
The general sentiment reflected in the available history appears mixed to negative. The bill was left in the House Transportation Committee, and a subcommittee recommended laying it on the table by a 7-3 vote, suggesting limited support at that stage. No committee transcript is available, so the record does not show detailed debate, but the procedural outcome indicates the measure did not advance.
The main points of contention likely involve the balance between consumer protection and insurer flexibility, as well as the policy of charging annual highway use fees to electric and fuel-efficient vehicles. Opponents may view the insurance provisions as burdensome on insurers or repair-network practices, while supporters would likely emphasize transparency and anti-steering protections for consumers. The highway use fee provisions may also draw criticism from electric vehicle owners and clean-transportation advocates who may see the fee as discouraging adoption of more efficient vehicles.
HB1281 would amend Virginia’s insurance code, motor vehicle fee provisions, and related tax-relief statute to impose additional disclosure and anti-steering requirements on insurers handling auto repair and glass claims, while also refining the annual highway use fee applied to alternative fuel, electric, and fuel-efficient vehicles. It would affect insurers, third-party claims administrators, repair shops, and vehicle owners by changing claim-handling rules and fee administration, including fee contests and refunds. The bill would not eliminate the highway use fee, but would continue and clarify its application and exemptions for specified vehicle classes.
The available legislative history suggests the bill faced skepticism in committee. A Transportation subcommittee recommended laying the bill on the table by a 7-3 vote, and the bill ultimately was left in the House Transportation Committee. With no transcript available, there is no detailed record of floor or committee arguments, but the procedural outcome indicates the measure did not have strong momentum and likely encountered opposition or concern from members reviewing it.
The most likely areas of contention are the insurance repair provisions and the highway use fee on electric and fuel-efficient vehicles. On the insurance side, insurers may object to expanded disclosure duties, anti-steering restrictions, and liability for third-party representatives, while consumer advocates and repair-industry interests may support those protections. On the transportation side, owners and advocates for electric and alternative fuel vehicles may oppose continued annual fees as a disincentive to cleaner vehicles, while supporters may argue the fee is needed to ensure equitable contributions to road funding. The lack of committee transcript limits certainty, but the subcommittee vote and committee disposition indicate these issues were not resolved in the bill’s favor.