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Uninsured and Underinsured Motorist Insurance Coverage - In General

UNINSURED MOTORIST/

UNDERINSURED MOTORIST COVERAGE

THE PURPOSE OF UM AND UIM INSURANCE

Definitions

Uninsured motorist coverage (UM coverage) provides the plaintiff with coverage against bodily injury caused by an uninsured or unknown motorist. Virginia law requires UM coverage in all insurance policies issued or delivered in Virginia, and on all policies issued for vehicles “principally garaged” in Virginia. The policies are liberally construed by the courts.

The definition of an uninsured motor vehicle is a motor vehicle for which: there is no bodily injury liability insurance or property damage liability insurance; there is insurance but the insurer denies coverage for any reason whatsoever; there is no bond or deposit of money or securities in lieu of insurance; the owner of the motor vehicle has not qualified as a self-insurer; the owner or operator of the motor vehicle is immune from liability for negligence; or the owner or operator of the motor vehicle is unknown.

Underinsured motorist coverage (UIM coverage) protects insured accident victims against negligent drivers who have some liability insurance available, but whose total liability coverage is less than the UM coverage available to the insured under her own policy.

The amount of UIM coverage available to an insured plaintiff is determined by totaling all available liability coverages, then totaling all available UM coverages. If the UM coverage exceed the total liability coverage, the difference is the amount of UIM available. For example, if the insured has $100,000 in UM coverage and the negligent driver has $50,000 in liability coverage, and the insured obtains a judgment for $100,000, he is underinsured in the amount of $50,000. The plaintiff insured would collect $50,000 from the driver’s liability coverage and another $50,000 from his own UIM coverage in the event he collects $100,000 or more.

Mandatory Requirement

All vehicles principally garaged in the Commonwealth, such as Chesterfield County, City of Richmond, etc., and all policies issued or delivered in Virginia must have UM/UIM coverage. This coverage applies even if the accident occurred in a state that has no UM/UIM law.

The amount of UM/UIM coverage will equal the limits of liability coverage on the policy, unless all the named insureds under that policy make a specific rejection, or unless the named insured buys higher UM/UIM limits.

Persons Covered by UM/UIM Insurance

The UM statute provides for two classes of insureds. Coverage varie s depending on which class an insured falls into.

The first class includes the named insured and the named insured’s spouse and relatives, as long as they are members of the same household. The first class is afforded the broadest coverage. Coverage extends to any damages caused by an uninsured motorist regardless of whether the insured was operating a vehicle insured on the policy or any other vehicle. Indeed, coverage is provided even if the insured sustains damages as a pedestrian.

The second class includes any person while using the vehicle to which the policy applies with the express or implied consent of the named insured and also includes any guest in the motor vehicle to which the policy applies. The case law is quite diverse on the question of what constitutes the “use” of a vehicle for purposes of coverage to persons of the second class.

A person can be a member of both classes. For example, a person can be a permissive user of another’s insured vehicle, and also have personal motor vehicle insurance available. This person would have dual coverage.