If you get into a car accident with a driver who doesn’t have enough insurance to cover your losses, Virginia law allows you to “stack” your underinsured motorist (UIM) coverage on top of the at-fault driver’s liability insurance.
Typically, a negligent at-fault driver’s liability insurance provides financial recovery to someone the driver injured through their actions behind the wheel. Under prior Virginia law, insurers could avoid paying UIM benefits if an insured driver’s policy limit did not exceed the liability insurance policy limits of the at-fault driver.
Motorists and passengers who suffer injuries in car accidents caused by other drivers should understand the rules for stacking underinsured motorist coverage in Virginia and how it may affect the compensation they recover in an injury claim.
What Is Underinsured Motorist Coverage in Virginia?
Auto insurance companies in Virginia are required to provide policyholders with a minimum of $50,000 per person and $100,000 per accident of combined uninsured/underinsured motorist coverage. UIM coverage goes into effect when an at-fault driver’s liability insurance coverage fails to compensate an accident victim for all their losses resulting from the injuries they suffered in a collision.
Some Virginia drivers buy the minimum liability insurance required by state law. However, after a significant crash, minimum coverage may not fully compensate an injured person. UIM coverage gives accident victims another source of financial relief, making it more likely that they obtain full compensation for the injuries they suffered in an auto collision.
How Does Insurance Stacking Work in Virginia?
Car accident victims with auto insurance policies issued on or after July 1, 2023, can now “stack” or combine their UIM policy limit with the at-fault driver’s available liability insurance. Specifically, Virginia law allows an auto accident victim to recover under UIM coverage without credit for bodily injury and property damage coverage available from a liable motorist.
For example, suppose you get hurt in a car accident caused by another driver. That driver has $100,000 per person of bodily injury liability coverage under their insurance, while you have $100,000 per person of UIM coverage. You incur $150,000 in losses due to your accident injuries. In that case, you can stack your UIM coverage on top of the at-fault driver’s liability coverage (which cannot pay you for all your injury losses) to recover full compensation for your injuries.
Are There Any Limitations on Insurance Stacking in Virginia?
Virginia law requires auto insurance companies to provide UIM coverage stacking by default. However, a policyholder can opt out of UIM stacking, usually in exchange for a lower insurance premium. A policyholder must provide written notice of their opt-out from UIM stacking to their insurance provider.
Some insurance policies may include provisions that limit how an insured can stack their UIM coverage, such as limiting the number of UIM policies that the driver can stack or excluding coverage for certain types of accidents or injuries.
When Can You Stack Your Policy?
An accident victim might stack their UIM policy on top of an at-fault driver’s liability policy when the available limits of the at-fault driver’s policy do not cover all of their losses from a car accident. For example, when you incur $100,000 in losses from a crash, and the at-fault driver has only bodily injury liability coverage of up to $50,000 per person, stacking your UIM coverage will allow you to recover more compensation than the at-fault driver’s insurance provides.
How Did Virginia’s Previous Uninsured/Underinsured Coverage Laws Work?
Virginia’s prior underinsured motorist coverage laws allowed auto insurance companies to deny UIM coverage to an insured if the policy limits of the insured’s UIM coverage did not exceed the at-fault driver’s liability insurance policy limits. The old law effectively gave auto insurers a “credit” or “offset” for the at-fault driver’s insurance that could nullify a UIM insured’s coverage, even if the insured’s losses exceeded the at-fault driver’s available liability insurance.
Even when a UIM insured’s policy limits exceeded the at-fault driver’s liability insurance, that liability insurance could offset the insured’s UIM coverage, giving them access to less insurance coverage than they thought they had purchased.
When Did Virginia’s New Uninsured and Underinsured Motorist Coverage Laws Go Into Effect?
The new underinsured motorist coverage law went into effect for policies issued or renewed on or after July 1, 2023. Virginia drivers with auto insurance policies issued before July 1, 2023, do not have access to the new stacking rules until they renew their policies after that date.
What Happens If You Opt Out of Virginia UM/UIM Coverage?
Auto insurers may encourage policyholders to opt out of stacked UIM coverage by offering them reduced insurance premiums. Policyholders who choose to submit a written opt-out notice would likely see a reduction of only a few dollars in their premiums.
However, gaining these minimal savings would mean giving up critical insurance coverage that can help insureds receive greater compensation for losses arising from injuries sustained in car crashes caused by other drivers’ carelessness. By opting out of stacked UIM coverage, you lose access to coverage if your UIM policy limits do not exceed the at-fault driver’s liability insurance policy limits.
Contact a Virginia Car Accident Lawyer Near You
Since 1911, Marks & Harrison has advocated for the rights and interests of accident victims across Virginia. We have a proven track record in some of the most notable injury cases in state history. With a team of 32 personal injury attorneys and over 130 support personnel, including investigators with backgrounds in law enforcement and insurance, we have the resources and skills to handle the most complex auto insurance claims.
Contact Marks & Harrison today for a free, no-obligation consultation with a car accident lawyer and learn more about your legal rights after a collision.
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