Virginia Introduces Legislation Regarding UIM Credit
The Commonwealth of Virginia has passed new legislation that will have a significant impact on insurance policyholders. The legislation eliminates Underinsured Motorist (UIM) credit, which will impact how UIM coverage is provided and utilized in the state. This blog will go into detail on the critical aspects of this new legislation and explore its potential implications for drivers and insurance companies in Virginia.
Will the UIM Credit Elimination Benefit Drivers?
The Virginia UIM credit allows drivers to offset their UIM coverage by the amount of available liability coverage. However, the new legislation eliminates this long-standing practice. This change means that individuals seeking UIM coverage will no longer have their coverage reduced based on the liability coverage provided by other parties involved in an accident.
Overall, eliminating this credit is a positive thing for any plaintiff involved in an accident since now UIM policies will not stack. This means the full UIM coverage will apply in addition to the full Business Interruption policy. As a result, this affords greater coverage for those injured due to another driver’s negligence.
Potential Impacts on the Insurance Industry
Eliminating UIM credit in Virginia will likely reshape the insurance landscape in several ways.
Premium Adjustments
Insurance companies will likely review and adjust their premium rates in response to this legislation. With increased payouts and potentially higher claims, premiums for UIM coverage could increase to ensure profitability for insurance providers.
Changes in Driver Behavior
The removal of UIM credit could also influence driver behavior, as individuals may reconsider the adequacy of their liability coverage. Drivers may opt for higher liability coverage limits to protect themselves in case of accidents involving underinsured motorists, leading to a potential increase in demand for higher coverage options.
Legal and Claims Process
Limiting UIM credit also impacts the legal and claims process. Legal professionals and insurance adjusters must adapt to the new framework and evaluate claims and settlements differently. The removal of the UIM credit can impact the determination of liability and compensation in auto accident cases.
Call For Help With Virginia’s New UIM Credit Legislation
Virginia’s new legislation eliminating UIM credit will shift the insurance landscape, providing enhanced protection for drivers involved in accidents with underinsured motorists. While this change will likely benefit drivers, insurance companies may face challenges adjusting to the new system. As the legislation comes into effect, it will be crucial for all stakeholders to stay informed and adapt to the evolving insurance landscape in Virginia.
If you or a loved one have been involved in an auto accident with an underinsured motorist, contact Price Benowitz to schedule a free case evaluation to learn how we can help.
