                                 CODE OF VIRGINIA

REMEDY FOR ARBITRARY REFUSAL OF MOTOR VEHICLE INSURANCE CLAIM (§ 8.01-66.1)

A. Whenever any insurance company licensed in this Commonwealth to write
insurance as defined in &#xA7; 38.2-124 denies, refuses or fails to pay to its
insured a property damage claim or medical expense benefit or loss of income
benefit claim under the provisions of a policy of motor vehicle insurance and it
is subsequently found by the judge of a court of proper jurisdiction that such
denial, refusal or failure to pay was not made in good faith, the company shall
be liable to the insured in an amount double the amount of the judgment, plus
interest from 30 days after the date the claim was submitted in writing to the
insurer or its authorized agent, together with reasonable attorney fees and
expenses.

B. Notwithstanding the provisions of subsection A, whenever any insurance
company licensed in this Commonwealth to write insurance as defined in &#xA7;
38.2-124 denies, refuses or fails to pay to a third party claimant, on behalf of
an insured to whom such company has issued a policy of motor vehicle liability
insurance, a claim of $3,500 or less made by such third party claimant and if
the judge of a court of proper jurisdiction finds that the insured is liable for
the claim, the third party claimant shall have a cause of action against the
insurance company. If the judge finds that such denial, refusal or failure to
pay was not made in good faith, the company, in addition to the liability
assumed by the company under the provisions of the insured&#8217;s policy of
motor vehicle liability insurance, shall be liable to the third party claimant
in an amount double the amount of the judgment awarded the third party claimant,
together with reasonable attorney fees and expenses.

C. Notwithstanding the provisions of subsections A and B, whenever any person
who has furnished proof of financial responsibility in lieu of obtaining a
policy or policies of motor vehicle liability insurance pursuant to the
provisions of Title 46.2 or any person who is required and has failed to furnish
such proof pursuant to the provisions of Title 46.2 denies, refuses, or fails to
pay to a claimant a claim of $3,500 or less made by such claimant as a result of
a motor vehicle accident, and if the trial judge of a court of proper
jurisdiction finds that such denial, refusal, or failure to pay was not made in
good faith, such person shall be liable to the claimant in an amount double the
amount of the judgment, together with reasonable attorney fees and expenses.
			For the purposes of this subsection, &#8220;person&#8221; means and includes
any natural person, firm, partnership, association, or corporation.

D. Whenever any insurance company licensed in the Commonwealth to write motor
vehicle insurance as defined in &#xA7; 38.2-124 (i) denies, refuses, fails to
pay, or fails to make a timely and reasonable settlement offer to its insured
under the provisions of any uninsured or underinsured motorist benefits coverage
in a policy of motor vehicle insurance applicable to the insured after the
insured has become legally entitled to recover or (ii) after all applicable
liability policy limits and underlying uninsured and underinsured motorists
benefits have been tendered or paid, rejects a reasonable settlement demand made
by the insured within the policy&#8217;s coverage limits for uninsured or
underinsured motorist benefits or fails to respond within a reasonable time
after being presented with such demand after the insured has become legally
entitled to recover, and it is subsequently found by a court of proper
jurisdiction that such denial, refusal, or failure to timely pay or failure to
make a timely and reasonable settlement offer, rejection of a reasonable
settlement demand, or failure to timely accept a reasonable settlement demand
was not made in good faith, in addition to the amount due and owing by the
insurance company to its insured on the judgment against the tortfeasor, the
insurance company shall also be liable to the insured in an amount up to double
the amount of the judgment obtained against the underinsured motorist, uninsured
motorist, immune motorist, unknown owner or operator, or released defendant in
the underlying personal injury or wrongful death action, not to exceed $500,000,
together with reasonable attorney fees for bringing a claim under this
subsection, and all costs and expenses incurred by the insured to secure a
judgment against the tortfeasor, and interest from 30 days after the date of
such denial or failure or the date the reasonable settlement demand was
submitted in writing. The insured or the insured&#8217;s representative may seek
adjudication of a claim that the insurance company did not act in good faith as
a posttrial motion before the court in which the underlying personal injury or
wrongful death judgment was obtained or as a separate action against the
company. If the insured or the insured&#8217;s representative seeks adjudication
as a separate action and the underlying judgment is appealed, any action filed
under this subsection shall be stayed by the court pending final resolution of
the appeal of the underlying judgment.

E. Prior to making a demand under this section, the claimant shall provide
notice to the insurer 45 days prior to making such demand along with information
and documentation sufficient for the insurer to assess the liability and damages
of the claimant.

F. There shall be no action for bad faith under this section if the insurer
tenders to the claimant the lesser of the (i) applicable limits of the policy or
(ii) monetary amount demanded by the claimant either prior to the
insurer&#8217;s receipt of a settlement offer from the claimant or within 45
days of the insurer&#8217;s receipt of the notice of the claimant&#8217;s intent
to make a claim and accompanying information and documentation pursuant to
subsection E.
			For the purposes of this section, the term &#8220;legally entitled to
recover&#8221; means the point in time when liability to the uninsured or
underinsured motorist insurance company&#8217;s insured has become reasonably
foreseeable without necessity of a judgment by its insured against an uninsured
or underinsured motorist, an unknown owner or operator, or an immune motorist.

HISTORY: 1977, c. 621; 1979, c. 521; 1980, c. 437; 1989, c. 698; 1991, c. 155;
1997, c. 401; 2002, c. 631; 2024, c. 781.