In a car accident, where the other driver is at fault, generally the non at-fault party relies on the at-fault party’s insurance to pay their medical bills and repair costs. But the issue becomes what happens when the other party’s insurance is insufficient to cover all the expenses. This is where, an “underinsured motorist policy” would come in to cover the difference. In other words, if a person is rear ended by a driver with the bare minimum insurance coverage required in Virginia ($25,000.00 per claimant, $50,000.00 per accident) and they have injuries that exceed minimum coverage, the injured person could go after their own underinsured motorist policy to cover the costs for their injuries. See §Va. Code 38.2-2206.
Currently, Virginia’s underinsured motorist statutes allow the injured party to recover against the at-fault party and then proceed against their own underinsured motorist coverage for additional amounts. However, in Virginia the total recovery that can be gained from the underinsured motorist policy is credited against any recovery made against the original tortfeasor. For example, if someone has $100,000.00 in underinsured motorist coverage, but recovered $25,000.00 from the motorist who caused their injuries, the most they’re able to get (assuming they went to a trial and recovered the full amount under the underinsured policy), would be $75,000.00. Under Virginia’s new underinsured policy, which takes effect on July 1, 2023, an injured motorist can recover the full amount under their underinsured motorist coverage without having their recovery offset by the amount they recovered against the original tortfeasor.
This change is significant as it now becomes almost essential that individuals maximize their underinsured motorist coverage to ensure that they are covered by their policy in the worst-case scenario. This change also represents a move towards speeding up the process and assisting parties with avoiding costs associated with prolonged, repeated litigation.