VIRGINIA CLIENT ADVISORY: SB256, Regarding UM/UIM Bad Faith Claims, is NOT Retroactive

In April 2024, Virginia Governor Glenn Youngkin signed into law SB256, titled “Motor Vehicle Insurance; remedies for bad faith for refusal of claims,” which had an effective date of July 1, 2024.  SB256 established a cause of action for bad faith claims handling on the part of an uninsured or underinsured motorist carrier.  The law contains the following language, which prevents claimants from bringing bad faith claims related to causes of action that accrued prior to July 1, 2024:

[T]he provisions of this act amending §§ 8.01-66.1 and 38.2-2206 of the Code of Virginia shall apply to any claim for personal injury or wrongful death arising out of a motor vehicle accident that occurs on or after July 1, 2024.

Unfortunately, while this language is included in the official statutory text, it is omitted from the statute in the most recent pocket-part of the code, and the online versions published by Lexis and Westlaw.  A copy of the slip law, which was enacted by the General Assembly, and includes the above language, can be found here: https://lis.virginia.gov/cgi-bin/legp604.exe?241+ful+CHAP0781+pdf.

This omission appears to have led to confusion among attorneys, as carriers have reported receiving several UIM bad faith letters from attorneys related to motor vehicle accidents that occurred prior to July 1, 2024.  As these claims become more common, it is important to be vigilant of the date of the accident at issue.

Questions about this advisory can be directed to Lily S. Smith at (571) 470-1906 or lsmith@tthlaw.com.