                                 CODE OF VIRGINIA

UNFAIR SETTLEMENT PRACTICES; REPLACEMENT AND REPAIR; PENALTY (§ 38.2-517)

A. No person shall:

   1. Require an insured or claimant to utilize designated replacement or repair
   facilities or services, or the products of designated manufacturers, as a
   prerequisite to settling or paying any claim arising under a policy or
   policies of insurance;

   2. Engage in any act of coercion or intimidation causing or intended to cause
   an insured or claimant to utilize designated replacement or repair facilities
   or services, or the products of designated manufacturers, in connection with
   settling or paying any claim arising under a policy or policies of insurance;

   3. Fail to disclose to the insured or claimant, prior to being referred to a
   third party representative in connection with a glass claim arising under a
   motor vehicle insurance policy, that the third party representative is not the
   insurer and is acting on behalf of the insurer;

   4. Fail to disclose to the insured or claimant, at such time as the insurer or
   its third party representative recommends the use of a designated motor
   vehicle replacement or repair facility or service, or products of a designated
   manufacturer, in connection with settling or paying any claim arising under a
   policy or policies of insurance, that the insured or claimant is under no
   obligation to use the replacement or repair facility or service or products of
   the manufacturer recommended by the insurer or by a representative of the
   insurer;

   5. Fail to disclose to the insured or claimant, at such time as it or its
   third party representative recommends the use of a designated motor vehicle
   replacement or repair facility in connection with settling or paying any claim
   arising under a policy or policies of insurance, that the insurer or its third
   party representative has a financial interest in such replacement or repair
   facility, if the insurer or its third party representative has such an
   interest; or

   6. Engage in the practice of capping. As used in this subdivision,
   &#8220;capping&#8221; means the setting of arbitrary and unreasonable limits
   on what an insurer will allow as reimbursement for paint and materials.

B. This section shall not be construed to require an insurer to pay an amount
for motor vehicle repair services or repair products necessary to properly and
fairly repair the vehicle to its pre-loss condition that is greater than the
prevailing competitive charges for equivalent services or products charged by
similar contractors or repair shops within a reasonable geographic or trade area
of the address of the repair facility. Offering an explanation of the extent of
an insurer&#8217;s obligation under this section to its policyholder or third
party claimant shall not constitute a violation of this section.

C. Any person violating this section shall be subject to the injunctive,
penalty, and enforcement provisions of Chapter 2 (&#xA7; 38.2-200 et seq.) of
this title. The Commission shall investigate, with the written authorization of
the insured or the claimant, any written complaints received pursuant to this
section, regardless of whether such written complaints are submitted by an
individual or a repair facility. For the purpose of this section, any insurance
company utilizing a third party representative shall be held accountable for any
violation of this section by such third party representative.

HISTORY: 1992, cc. 870, 882; 1999, c. 129; 2003, c. 361; 2004, c. 767; 2008, cc.
111, 516.