This post is one of four dealing with uninsured and/or underinsured motorist claims. The other three are general principles, calculating the coverage, and settlements.
Car Accident Underinsured Motorist Coverage-Finding Coverage-Determine Value
The availability of UIM coverage is a product of the value of the claim. Therefore you must first determine the value of the claim to determine whether or not you even need to look at UIM coverage. The key distinctions between the current definition of underinsured and the previous definition is that now the definition is the difference between the defendant’s available liability coverage and the plaintiff’s damages. This is capped at the total amount of UIM coverage.
Car Accident Underinsured Motorist Coverage-Finding Coverage-Determine Liability Coverage
A. Turn Over Every Rock to Determine Coverage.
See the blogpost on this site on liability coverage to get a full grasp of where liability coverage may be found. Effective July 1, 2024, drivers must carry auto insurance in the amounts specified in Va. Code § 46.2-472 and 46.2-100.
B. More than One Source of Coverage for Defendant.
If two or more policies cover defendant, then you must identify all policies. You must get all liability policies on the table before deciding if you have a UIM claim.
C. Available Coverage.
The statute defines the term “available for payment”. It means the amount of liability coverage reduced by the payment of any other claims arising out of the same occurrence. For instance, three people are injured in one collision. Total policy is $100,000. The amount available for your plaintiff may only be $25,000. The other $75,000 may have been paid to the two other claimants. Normally in a case like that, a liability carrier will not settle with any one claimant unless they can settle with all three.
Take a case where there are several claimants against a 50/100 liability policy. The amount paid to your plaintiff is $33,000. Your UIM coverage is 50/100. Depending on the value of the case the full $50,000 may be in play.
If there is a genuine issue as to what the total liability coverage was and what each claimant received it may be prudent to get the consent of UIM before settling with liability.
The defendant’s carrier in some circumstances may try to work a Brown v. Kirkpatrick arrangement. That is, they contact the UIM and secure a waiver of subrogation. In exchange for that, they defend the case in litigation. If the liability carrier wins, they save money. If the liability carrier loses, they have fully protected their insured. This only works where the UIM limits are high enough to protect the defendant. This could be a reason for not disclosing what your UIM limits are.
D. Negligent Entrustment.
Where you have a potential negligent entrustment claim, you may actually have 2 claims against the liability policy. If the limits are $100,000 and the carrier has offered the limits on behalf of the driver, there may still be more available coverage. In particular the coverage may be $100,000 on behalf of the negligent trustor. Where that is the case, then Va. Code § 38.2-2206.K may apply. What that says is that even though there may be a claim out there for negligent entrustment, if that claim is not expressly released by terms of the Release then it is not released.
In that type of situation, you probably want to get the approval of UIM before doing anything that might release the trustor.
Car Accident Underinsured Motorist Coverage-Finding Coverage-Operation, Ownership, Maintenance or Use
There must be some causal relationship between the incident causing the injury and the defendant’s operation, ownership, maintenance or use of the uninsured/underinsured motor vehicle as a vehicle.
i. Motor Vehicle
A motor vehicle in Virginia is defined as being a self-propelled wheeled conveyance that does not run on rails. Hill v. State Farm, 237 Va. 148 (1989) As such an ATV would be a motor vehicle. Also Va. Code § 46.2-100 defines a motor vehicle for purposes of that title. Motor vehicle is not defined in the Virginia Family Auto Policy.
ii. Motor Vehicle as Motor Vehicle
If the vehicle is being used for a drive-by shooting, there probably is no coverage. Travelers Insurance Company v. LaClair, 250 Va. 368 (2002) The vehicle must be used as a vehicle. Utica Mutual v. Travelers, 223 Va. 145, 147 (1982); Fireman’s Fund v. Sleigh, 267 Va. 768 (2004)
In Nationwide v. Smelser, 264 Va. 109 (2002), a passenger in a moving uninsured car intentionally tried to steal Ms. Smelser’s purse as she was walking. Coverage was upheld. In Sleigh, a defendant used her uninsured vehicle as a vehicle when she intentionally slammed her driver’s side door into the plaintiff who was a meter maid writing her a parking ticket. In Travelers, coverage was found where an uninsured motorist deliberately ran the insured’s car off the road.
The word “accident” is not used in the statute. It may be used in some policies. That term in the policy however should not be deemed to overrule the statute. Criminal acts may be covered in some instances.
iii. Operation, Ownership, Maintenance or Use
An employee who works at a gas station is taking out the trash. While doing so, he is hit by an uninsured motor vehicle driven by a customer. Is the employee covered under the UM policy? Probably not. He is not a named insured. Also his injury does not arise out of the operation of a vehicle owned, operated, maintained or used by the gas station.
An uninsured motorist walking approximately 200 feet away from a vehicle who drops a spare tire he is carrying which then strikes another vehicle is involved in the maintenance of a vehicle. Colonial Insurance v. Rainey, 237 Va. 270 (1989)
Criminal conduct typically does not give rise to UM coverage. However an instance where an insured was injured by being dragged and knocked to the pavement after the defendant, John Doe, reached out of his vehicle to snatch her purse did constitute use. Nationwide v. Smelser, 264 Va. 109 (2002) An instance where the plaintiff is hit by a bottle thrown from a moving vehicle does not constitute use because there was no evidence as to who threw the bottle i.e., was it thrown by the unknown driver or someone else.
The uninsured motorist does not need to be in contact with the uninsured vehicle to qualify the plaintiff for UM coverage. As seen in Rainey, there must be some connection to the use of the vehicle. A police officer injured in a scuffle with a motorist who he had pursued some distance away from their vehicles was not entitled to UM coverage. Simpson v. Va. Municipal Liability Pool, et al., 279 Va. 694 (2010) Loading and unloading may constitute use. London Guarantee v. CB White, 188 Va. 195 (1948)
Imagine a drunk is lying on the road. You swerve to avoid the drunk and hit an oncoming motorist. There is no negligence on your part. The oncoming motorist files a claim against their carrier. The oncoming motorist’s injury did not arise out of your ownership, maintenance or use of an uninsured or underinsured motor vehicle. Your vehicle is insured. You’re not negligent. There is no UM/UIM coverage.
A highway worker placing road signs 6-10 feet behind his truck constitutes use. A construction manager giving hand signals to a truck driver is thereby using the truck. A job site employee using supervisor’s pickup truck warning lights as a safety vehicle constitutes use. Coverage may not apply where a person who is simply a listed driving is doing these same things.
“Use” may be governed by distance from the vehicle, direction of exit path, time elapsed from exiting the vehicle. Bratton v. Selective, 290 Va. 314, 329 (2015)
A child crossing the street to board a school bus and is hit by a vehicle is deemed to be using the school bus. Newman v. Erie, 256 Va. 501 (1998) Changing a flat tire on another person’s parked car is using the car, thereby creating second class coverage. Edwards v. GEICO, 256 Va. 128 (1998)
Look at Occupied Vehicle First
Normally the coverage on that is going to be primary. The two exceptions to that are self-insured vehicles and garage vehicles.
i. Self-insured vehicles. See self-insured entities.
ii. Garage-Keeper’s Policy
A garage-keeper’s policy which normally is not primary for purposes of liability may be primary for purposes of UM/UIM.
Look at the Driver of the Occupied Vehicle
Where a client is injured while riding as a passenger in a vehicle operated by a driver who does not own that vehicle, the client may be entitled to UM/UIM coverage through insurance available to the driver. Nationwide v. Hill, 247 Va. 78 (1994) In that case, the plaintiff could properly make a claim for liability and UIM coverage on the same policy because UIM involved a second vehicle. This is in contrast to Trisvan.
In determining what coverage may be available, it’s appropriate to mail a letter to the defendant requesting information concerning insurance on the vehicle, any insurance on which the defendant is the named insured and any other insurance in the defendant’s household.
When the defendant has been charged with DUI, the claimant can make a written request to the defendant’s insurance carrier to disclose the limits of coverage, even when the claimant has not incurred bills and lost wages in excess of $12,500. Va. Code § 8.01-417. Under that same Code section you can request the defendant’s current physical address and the carrier must respond within 30 days.
Look at the Plaintiff’s Home
Is it possible the plaintiff may be insured under a relative’s policy? You need to identify those relatives, their policies and the amount of coverage. The issue comes down to what is a household and is the plaintiff a member of that household. In addition there may be an issue of whether the plaintiff could be a member of two households. Brogdon v. Clark, 63 Va. Cir. 85 (2003)
Take an example of where Mom is riding as a passenger in a vehicle she owns. the vehicle is driven by Dad. Son lives with Mom and Dad and he has his own vehicle with UIM coverage. Can Mom tap into that coverage? The answer is yes under Va. Code § 38.2-2206.B(1).
Car Accident Underinsured Motorist Coverage-Finding Coverage-Election of Credit
An insured does have a right to pick UM coverage that is less than the liability coverage. That selection must be signed by the insured with the appropriate box checked. Under White v. National Union Fire, 913 F.2d 165 (4th Cir., 1990), the intent of the parties is irrelevant. The form must be returned with the lesser coverage box checked, otherwise the two coverages are identical.
For policies issued prior to July 1, 2023, the credit is the total amount of liability coverage insuring the defendant subtracted from the total UIM coverage available to the plaintiff. It is that difference that is paid to the plaintiff.
As to policies becoming effective in July 1, 2023 or later, if elected, there is no credit/offset as to the vehicle involved of the insured. However the credit does apply to all other vehicles. The credit election only applies to motor vehicles occupied by the insured. The new law only applies to crashes on or after July 1, 2023 if the policy was issued, delivered or renewed on or after July 1, 2023 but before the crash.
Finding Coverage-Taxicabs
See the blog post on this site dealing with taxicabs. Pursuant to Va. Code § 46.2-2507, self-insured taxicabs get a UIM credit regardless of the priority of payment. The practical effect is that cabs always get a UIM credit.
This post is one of several dealing with uninsured and/or underinsured motorist claims. The others are general principles, calculating coverage, settling ,litigation.
Call or contact us for a free consult. Also for more info on underinsured coverage see the Wikipedia pages.
