UIM Date of Issue/Renewal

The legislation enacting the new Virginia UIM settlement procedure law states:

“The provision of this act shall apply to policies issued or renewed on or after January 1, 2016.”

Must both the defendant’s liability policy and the applicable UIM policy have been issued or renewed in 2016 before the plaintiff’s motor vehicle accident? ANSWER: Most likely not. Since the focus of the new legislation is on the liability carrier and the defendant, it appears that only the liability policy need be issued or renewed in 2016 before the plaintiff’s motor vehicle accident. However, there is no “guarantee” since the enacting legislation uses the term “policies” and it could be argued that “policies includes UIM policies.

1. Example of UIM Carrier Refusing to Pay
   
   Defendant David’s Geico liability policy renewed on May 5, 2016 – Crash May 6, 2016. Plaintiff Peter’s Allstate UIM policy renews a day after the crash on May 7, 2016. Plaintiff and Defendant sign a liability release under the new law without prejudice to the plaintiff’s UIM claim with Allstate, terminating Allstate’s subrogation rights and Geico’s duty to defend. The plaintiff now makes a claim with Allstate for UIM benefits. Allstate refuses and argues that it UIM policy was not renewed in 2016 until after the plaintiff’s crash; therefore, the old law was in effect, and, as a result, the plaintiff does not get the benefit of the new law. The plaintiff destroyed his UIM claim by violating Allstate’s UIM consent to settle clause with prejudice and terminated its subrogation rights by signing the liability release under the old law.


2. The Plaintiff’s Rebuttal
   
   The term “policies” in the remedial UIM settlement procedure legislation creates an ambiguity. (1) It means only liability policies, (2) only UIM policies; or (3) both liability and UIM policies. Since the new law is remedial legislation meant to remedy past UIM carrier abuses, the ambiguity in the new legislation should be interpreted to favor coverage. USAA Casualty Ins. Co. v. Alexander, 248.Va. 185, 445 S.E.2d 145 (1994).


3. The UIM Carrier's Consent
   
   Before accepting a liability policy limits offer, simply call the UIM carrier and ask if it requires both liability and UIM polices to be issued or renewed in 2016, before the plaintiff’s motor vehicle accident, for the new law allowing the plaintiff to settle and receive payment from the liability carrier without prejudice to the plaintiff’s UIM claim to apply. If the UIM carrier refuses to give you the “all clear sign”, you may want to consider proceeding under the old law instead of litigating the issue. There should be no problem with this issue beginning with motor vehicle accidents in 2017, since by then, both liability and UIM policies will be issued or renewed after January 1, 2016.

Prince William personal injury attorney Gerald Schwartz has 30 years experience representing injured people. He is one of the “Top 100 Trial Lawyers” in Virginia. For a free consultation with Gerald Schwartz, call 1-800-423-0055.