If I’m in a car accident, what happens if the other driver doesn’t have enough insurance?

Our Richmond Law Firm Can Help You After Accidents With Underinsured Drivers

Medical bills and other losses can quickly pile up in the wake of a car crash. This can be particularly frustrating when you know you’re not to blame for causing the collision. What can you do if the at-fault driver doesn’t carry enough insurance to pay for damages? With recent changes to underinsured motorist coverage in Virginia, victims may be able to reduce the financial strain of lost wages and other costs. Trust our team of experienced car accident lawyers at The Mottley Law Firm to explain your options in an easy-to-understand way.

How Does Uninsured and Underinsured Motorist Coverage Work?

Auto insurance covers numerous types of car accidents. You may expand your policy to cover vandalism, for instance, or if you’re involved in an accident with a commercial truck. Within a liability policy are uninsured motorist (UM) and underinsured motorist (UIM) coverage. This covers the costs of other people who are harmed in an accident where you’re at fault.

So, let’s say you’re involved in an accident that wasn’t your fault, and the negligent motorist’s liability/UM/UIM coverage isn’t enough to cover your costs regarding property damage, medical bills, lost wages, and other out-of-pocket expenses. You’d need to file a claim with your insurer, drawing from your own UM/UIM policy to cover these costs. Doing so doesn’t affect your insurance rates because you’re not to blame for the accident.

New Virginia UM/UIM Insurance Laws Effective July 1, 2023

The Commonwealth of Virginia passed an update to its statute on underinsured motorist insurance coverage during the 2022 legislative session. The changes to Code of Virginia § 38.2-2206 apply to all car insurance policies issued or renewed after July 1, 2023.

The update dramatically impacts how much coverage you may have available if you’re involved in a car accident with an uninsured or underinsured motorist. It allows victims to “stack” or combine insurance policies for greater coverage.

The Old System Subtracted Insurance Coverage

Before July 2023, you would subtract the at-fault driver’s liability coverage from your UM/UIM coverage, so the maximum you could recover is equal to your UM/UIM maximum amount.

For example:

You’re involved in an accident with Lisa.
Lisa is 100 percent at fault for the incident.
Lisa has $50,000 in liability coverage.
You have $75,000 in underinsured motorist coverage.
Subtract $50,000 from $75,000 to get $25,000.
You can seek up to $50,000 in damages from Lisa’s insurance policy.
You can claim up to $25,000 in damages from your UM/UIM policy.
Together, you may be able to recover up to $75,000 in damages.

The New System Stacks Insurance Coverage

Now, Virginia drivers can stack the two types of insurance coverage, thus combining policy maximums to claim a higher amount. You simply add your UM/UIM coverage maximum with the at-fault driver’s liability coverage maximum.

Following the same example as above:

You’re involved in an accident with Lisa.
Lisa is 100 percent at fault for the incident.
Lisa has $50,000 in liability coverage.
You have $75,000 in underinsured motorist coverage.
Add $50,000 and $75,000 together to get $125,000.
Seek up to $50,000 in damages from Lisa’s liability policy.
Seek up to $75,000 from your UIM coverage.
Together, you may be able to recover up to $125,000 in damages.

Should You Opt Out of the New Rules?

The new rules for UM/UIM coverage apply by default to all new and renewed Virginia car insurance policies—it’s automatic. While you can choose to opt-out, it’s generally not in your best interest. With the rising costs of car accident injury cases, greater coverage provides more peace of mind. The potential discount is insignificant compared to the extra coverage you receive by stacking policies.

Seeking Recovery for Damages From Personal Assets

Sometimes, car insurance policies may not provide enough coverage to pay for all your costs and damages. Insurers may even deny your claim altogether. In these cases, you may have the option to file a personal injury lawsuit against the at-fault driver. The statute of limitations in Virginia for car crashes is two years. If you don’t file for legal action within this time limit, the court will likely dismiss your claim.

Trusted Virginia Car Accident Lawyers Guide the Way

Dealing with the aftermath of a car crash is never easy. The situation is further complicated when the at-fault driver has insufficient insurance to pay for damages. For clarity on your recovery options, it’s prudent to hire a Virginia car accident lawyer with expertise in this area.

At The Mottley Law Firm, our legal team has years of experience dealing with cases just like these. The keen insight and in-depth knowledge of Virginia laws become even more crucial in complex cases. Proving liability in multi-vehicle accidents can be tricky. Accidents involving car shares, out-of-state drivers, and drunk drivers can be complicated. Trust our attorneys to fight for your right to fair compensation.