Virginia Personal Injury and Medical Malpractice Blog

VA House Bill HB-93 Aims To Close Insurance Loophole

Yesterday the Virginia House Courts of Justice Committee unanimously passed HB-93, a bill aimed at closing an insurance loophole being abused by Virginia's underinsured motorist (UIM) carriers.

In Virginia, a UIM carrier has no duty to pay on a claim until the underinsured motorist has a judgment entered against them. Therefore, there is no incentive for the UIM carrier to settle even if the liability insurer has done so. As it stands now, even if a liability insurer has paid its full coverage, it is still responsible for the costs and expenses of continued litigation and trial if the UIM carrier chooses not to settle. The UIM carrier holds onto its money for a longer period of time at the expense of time and money to the court and taxpayers.

The bill proposes to shift the burden of cost for continued litigation after a liability insurer has paid out its maximum amount from the liability insurer to the UIM carrier. This means that UIM carriers will either have to settle or pay the costs to continue the case after the liability insurer has settled.

The benefits to this loophole being closed are numerous, saving time and money for the state, while forcing insurers to timely payout on the policies they've issued.

Here are some more arguments for VA House Bill HB-93 and changes to the Virginia underinsured motorist insurance law.

HB-93 could be heard by the full House of Delegates as early as this week.