In a move to expedite the payment of uninsured and underinsured motorist claims, the Virginia House and Senate passed VA House Bill 1819, which has been sent to the Governor for executive approval. Section 38.2-2206 of the Code of Virginia is amended to 8.01-66.1:1 by the Bill and the relevant text that does away with underinsured subrogation claims states in part:
“Any insurer paying underinsured motorist benefits to an insured, by way of settlement or payment pursuant to a judgment, shall have no right of subrogation against any individual or entity who settled with the underinsured motorist benefits insurer’s insured pursuant to subsection K of section 38.2-2206 unless the underinsured motorist failed to reasonably cooperate in the defense of any lawsuit brought against him. An underinsured motorist shall be presumed to have failed to reasonably cooperate if he fails or refuses…”
This new language added to the Virginia Code now prohibits the subrogation rights of insurers against those drivers who cause damages above and beyond their personal policy limits. Breaking with centuries long tradition in Virginia, this alters subrogation’s favored status promulgated in the Virginia Code.
