Introduction
As of May 31, 2023, the state of Virginia has enacted a new underinsured motorist law, which aims to protect drivers and passengers from the financial consequences of accidents caused by underinsured motorists. This new law brings significant changes to the way underinsured motorist coverage works in the state, and it is crucial for drivers to understand these changes to ensure they are adequately protected. In this blog, we will discuss the key aspects of the new Virginia underinsured motorist law and provide insights into how it affects drivers and their insurance policies.
Background
Underinsured motorist coverage is an essential component of auto insurance policies, designed to protect policyholders from the financial burden of accidents caused by drivers with insufficient insurance coverage. In Virginia, drivers are required to carry a minimum amount of liability insurance, which includes $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $20,000 for property damage. However, these minimum limits may not be enough to cover the costs of a severe accident, leaving the injured party with significant out-of-pocket expenses.
Key Changes in the New Virginia Underinsured Motorist Law
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Stacking of Underinsured Motorist Coverage
One of the most significant changes in the new law is the introduction of “stacking” underinsured motorist coverage. Stacking allows policyholders to combine or “stack” the coverage limits of multiple vehicles insured under the same policy. For example, if a driver has two vehicles, each with $50,000 in underinsured motorist coverage, they can stack the coverage to provide a total of $100,000 in protection.
This change allows policyholders to maximize their coverage in case of an accident with an underinsured driver, ensuring that they have adequate financial protection.
- Mandatory Offer of Increased Coverage Limits
Another important change in the new law is that insurance companies are now required to offer policyholders the option to purchase higher limits of underinsured motorist coverage. This mandatory offer aims to ensure that drivers have the opportunity to choose higher coverage limits, providing additional protection in case of an accident with an underinsured driver.
- Changes to the Definition of “Underinsured Motorist”
The new law also modifies the definition of an “underinsured motorist.” Previously, a driver was considered underinsured if their liability coverage was less than the injured party’s underinsured motorist coverage. Under the new law, a driver is considered underinsured if their liability coverage is less than the injured party’s total damages, regardless of the underinsured motorist coverage limits.
Conclusion
The new Virginia underinsured motorist law brings significant changes to the way underinsured motorist coverage works in the state. By introducing stacking, mandatory offers of increased coverage limits, and a revised definition of “underinsured motorist,” the law aims to provide better financial protection to drivers and passengers involved in accidents with underinsured motorists.
It is essential for drivers to review their auto insurance policies and consult with their insurance agents to ensure they have adequate coverage under the new law. By understanding the changes and making informed decisions, drivers can protect themselves and their families from the financial consequences of accidents caused by underinsured motorists.
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