UM/UIM Demand Letter - Virginia

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

Commonwealth of Virginia

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION - FOR RESOLUTION PURPOSES ONLY
PROTECTED UNDER Va. R. Evid. 2:408 AND FED. R. EVID. 408
STATUTORY NOTICE UNDER Va. Code § 8.01-66.1

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA EMAIL TO: [ADJUSTER_EMAIL_______]

Date: [__/__/____]

[INSURANCE_COMPANY_NAME_______]
[UM_UIM_CLAIMS_DEPARTMENT_ADDRESS__]
[CITY__], Virginia [ZIP______]

Attention: [ADJUSTER_NAME__], [ADJUSTER_TITLE__]

Re: UM/UIM POLICY LIMITS DEMAND — COMMONWEALTH OF VIRGINIA
Insured/Claimant: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
UM/UIM Policy Limits: $[________________________________]
Tortfeasor: [________________________________]
Tortfeasor's Carrier: [________________________________]
Tortfeasor's Limits: $[________________________________]
Response Deadline: [__/__/____] (minimum 45 days per Va. Code § 8.01-66.1(C))

Dear [ADJUSTER_NAME____]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [CLIENT_NAME________] ("our client") in connection with a claim for uninsured/underinsured motorist ("UM/UIM") benefits under the laws of the Commonwealth of Virginia arising from a motor vehicle collision that occurred on [__/__/____]. This letter constitutes a formal demand for payment of the full UM/UIM policy limits of $[________________________________].

This letter also serves as formal notice under Va. Code § 8.01-66.1, Virginia's statutory bad faith remedy for motor vehicle insurance claims. Pursuant to Va. Code § 8.01-66.1(C), our client hereby provides the required 45-day pre-suit notice together with sufficient information and documentation to allow [CARRIER_SHORT_NAME____] to assess liability and damages. Upon expiration of 45 days, if the Company has not tendered the full amount owed, we will pursue all remedies including double the judgment obtained against the tortfeasor (up to $500,000), attorney fees, and all costs and expenses as authorized by Va. Code § 8.01-66.1(D).

Our client's damages far exceed the available coverage. Under Virginia law, UM/UIM coverage exists precisely for situations like this — to protect the Commonwealth's motorists when the negligent party lacks sufficient coverage to compensate the innocent victim.

II. GOVERNING VIRGINIA UM/UIM LAW

A. Virginia Code § 38.2-2206 — UM/UIM Coverage Requirement

Va. Code § 38.2-2206 is the foundational UM/UIM statute in Virginia. It requires every motor vehicle liability policy issued or delivered in the Commonwealth to include uninsured motorist coverage in an amount not less than the financial responsibility limits specified in Va. Code § 46.2-472, and provides underinsured motorist coverage for situations in which the tortfeasor's liability limits are exhausted or insufficient.

B. 2025 Minimum Limits Increase

Effective January 1, 2025, Virginia increased its minimum motor vehicle financial responsibility (and therefore UM) limits from $30,000/$60,000/$20,000 to $50,000 per person / $100,000 per accident / $25,000 property damage. Any policy issued or renewed on or after that date carries these increased statutory minimums regardless of policy language to the contrary. Va. Code § 46.2-472; Va. Code § 38.2-2206.

C. UIM "Stacking" on Top of Tortfeasor Limits

Under Va. Code § 38.2-2206(B), as amended effective July 1, 2023, UIM coverage now stacks on top of the tortfeasor's liability coverage rather than being reduced by it. The statute provides that the UIM insurer must pay damages owed to the insured in addition to any bodily injury or property damage liability coverage applicable to the insured's damages, eliminating the prior "credit" that reduced UIM limits by the tortfeasor's payment. This represents a significant expansion of UIM protection for Virginia motorists.

D. Consent-to-Settle Procedure — Va. Code § 38.2-2206(L)

Virginia law requires the injured insured to notify the UIM carrier before settling with the tortfeasor. Va. Code § 38.2-2206(L). The UIM carrier has a limited time to elect either (1) to consent to the settlement and waive subrogation, or (2) to advance the tortfeasor's limits to the insured and preserve subrogation rights against the tortfeasor. Failure of the UIM carrier to act constitutes consent to settle.

E. Virginia Statutory Bad Faith — Va. Code § 8.01-66.1

Effective July 1, 2024, Va. Code § 8.01-66.1 was substantially amended to create meaningful bad faith remedies for UM/UIM claims. Under the current statute:

• For third-party claims of $3,500 or less: if an insurer denies, refuses, or fails to pay and the court finds the denial was not in good faith, the insurer is liable for double the judgment, plus reasonable attorney fees and expenses.
• For UM/UIM claims in any amount: if the court determines that the insurer's conduct was not in good faith, the court shall award the claimant up to double the judgment obtained against the tortfeasor, not to exceed $500,000, together with reasonable attorney fees and all costs and expenses.
• 45-day pre-suit notice is a statutory prerequisite. This letter satisfies that requirement.

F. Governing Case Law

• Manu v. GEICO Cas. Co., 293 Va. 371 (2017) — the Supreme Court of Virginia addressed UIM carrier obligations and the scope of recoverable benefits.
• State Farm Mut. Auto. Ins. Co. v. Floyd, 235 Va. 136 (1988) — limiting the common-law tort of first-party bad faith, which is why the 2024 amendments to § 8.01-66.1 were enacted.
• A&E Supply Co. v. Nationwide Mut. Fire Ins. Co., 798 F.2d 669 (4th Cir. 1986) — Fourth Circuit's foundational framework for Virginia bad faith litigation.

G. Coverage Analysis Under the Policy

III. THE COLLISION AND VIRGINIA LIABILITY ANALYSIS

A. Facts of the Collision

On [__/__/____], at approximately [__:__ __.m.], our client was [DESCRIBE_CLIENT_ACTIVITY_____] at or near [LOCATIONOF_COLLISION____] in [COUNTY/CITY__], Virginia.

[DETAILED_DESCRIPTION_OF_COLLISION________]

B. Tortfeasor's Negligence Under Virginia Law

The tortfeasor, [TORTFEASOR_NAME____], was negligent under Virginia common law and the following Title 46.2 provisions:

☐ Va. Code § 46.2-816 (following too closely)
☐ Va. Code § 46.2-820 (right-of-way at intersections)
☐ Va. Code § 46.2-830 (obedience to highway signs)
☐ Va. Code § 46.2-852 (reckless driving, general)
☐ Va. Code § 46.2-862 (reckless driving, 20+ mph over limit or 85+ mph)
☐ Va. Code § 46.2-266 (driving under the influence)
☐ Va. Code § 46.2-818.2 (handheld device while driving)
☐ Va. Code § 46.2-888 (stopping on highway)
☐ Common-law failure to keep proper lookout
☐ Common-law failure to maintain reasonable control
☐ [OTHER_NEGLIGENCE________]

C. Evidence of Liability

1. Virginia Traffic Crash Report (Form FR-300P)
[LAW_ENFORCEMENT_AGENCY__] Virginia Traffic Crash Report, Report No. [________________], investigating officer [OFFICER_NAME__]. The officer's determination of contributing circumstances is attached.

2. Witness Statements
[NUMBER] independent witnesses observed the collision. Statements are enclosed.

3. Physical Evidence
Point of impact, vehicle damage patterns, skid/yaw marks, and debris field analysis.

4. Expert Analysis
[ACCIDENT_RECONSTRUCTIONIST_NAME____] has concluded [SUMMARY_OF_OPINION________].

D. Virginia's Pure Contributory Negligence Rule — Client's Complete Freedom from Fault

Virginia is one of only four U.S. jurisdictions (along with Alabama, Maryland, and North Carolina, plus the District of Columbia) that retains the pure contributory negligence doctrine. Under Virginia common law, any contributory negligence on the part of the plaintiff — even 1% — operates as a complete bar to recovery. Baskett v. Banks, 186 Va. 1022 (1947); Sawyer v. Comerci, 264 Va. 68 (2002).

Because of this harsh rule, Virginia insurers frequently attempt to conjure some theory of contributory fault to defeat otherwise meritorious claims. In this case, no such theory exists:

• [SPECIFIC_FACT_ESTABLISHING_CLIENT_HAD_RIGHT_OF_WAY____]
• [SPECIFIC_FACT_SHOWING_CLIENT_WAS_BELTED______]
• [SPECIFIC_FACT_NEGATING_DISTRACTION________]
• [SPECIFIC_FACT_NEGATING_SPEEDING________]

The investigating officer did not issue any citation to our client, and the police report assigns no contributing circumstance to our client. Liability is not merely reasonably clear — it is incontestable.

IV. OUR CLIENT'S INJURIES AND MEDICAL TREATMENT

A. Injuries Sustained

As a direct and proximate result of this collision, our client sustained:

Primary Injuries:

• [PRIMARY_INJURY_1________]
• [PRIMARY_INJURY_2________]
• [PRIMARY_INJURY_3________]

B. Treatment Timeline

C. Authenticated Medical Records under Va. Code § 8.01-413

All medical records and itemized bills enclosed are authenticated pursuant to Va. Code § 8.01-413 (records of health care providers) and Va. Code § 8.01-390.2 (admissibility of medical records), which permit admission without the testimony of the custodian where the records are accompanied by a proper certification. Certified HIPAA-compliant authorizations are also enclosed pursuant to Va. Code § 32.1-127.1:03.

D. Current Condition and Prognosis

[DESCRIBE_CURRENT_CONDITION_AND_PROGNOSIS________]

E. Permanent Impairment

V. DAMAGES UNDER VIRGINIA LAW

A. Past Medical Expenses

Under Virginia law, our client is entitled to recover the reasonable value of medical services, and the "collateral source rule" bars reduction for payments made by health insurers or Medicare/Medicaid. Acuar v. Letourneau, 260 Va. 180 (2000).

B. Future Medical Expenses (Reduced to Present Value)

C. Lost Income and Lost Earning Capacity

Past Lost Income: $[________________]
Future Lost Earning Capacity (Present Value): $[________________]

D. Pain, Suffering, Inconvenience, Disfigurement, and Humiliation

Virginia permits recovery for physical pain and mental suffering, inconvenience, disfigurement, deformity, and humiliation. See Bulala v. Boyd, 239 Va. 218 (1990); Virginia Model Jury Instruction 9.000.

[DESCRIBE_PAIN_AND_SUFFERING________]

E. Damages Summary

F. Punitive Damages Considerations

If facts warrant (e.g., DUI with BAC ≥ 0.15, hit-and-run, or willful and wanton conduct), Virginia permits punitive damages. Such damages are capped at $350,000 under Va. Code § 8.01-38.1. In DUI cases, Huffman v. Love, 245 Va. 311 (1993), and its progeny permit punitive damages where the defendant's conduct demonstrates conscious disregard for the safety of others.

VI. UNDERLYING LIABILITY SETTLEMENT AND CONSENT-TO-SETTLE

A. Status of Tortfeasor Settlement

We ☐ have reached ☐ are pursuing settlement with [TORTFEASOR_CARRIER____] for the tortfeasor's policy limits of $[____________].

B. Consent-to-Settle Notice — Va. Code § 38.2-2206(L)

Pursuant to Va. Code § 38.2-2206(L), this letter constitutes notice of the proposed tortfeasor settlement. [CARRIER_SHORT_NAME____] must, within the statutory period:

1. Consent to the settlement and waive subrogation; OR
2. Advance to our client the amount of the tortfeasor's offer (preserving subrogation against the tortfeasor).

Failure to respond within [____] days will be deemed consent, and our client will proceed to execute the tortfeasor settlement while preserving all UIM rights.

VII. UIM BENEFITS CALCULATION — POST-2023 "STACKING" FORMULA

Because the 2023 amendments to Va. Code § 38.2-2206(B) eliminated the prior "credit" for the tortfeasor's payment, UIM benefits are now calculated by stacking coverage on top of the tortfeasor's limits:

We hereby demand payment of the full UM/UIM policy limits of $[UM_UIM_LIMITS_____].

VIII. VIRGINIA BAD FAITH NOTICE UNDER Va. Code § 8.01-66.1

A. Formal Statutory Notice

This letter constitutes the 45-day pre-suit notice required by Va. Code § 8.01-66.1(C) as a prerequisite to suit for statutory bad faith. Enclosed is sufficient information and documentation for [CARRIER_SHORT_NAME____] to assess liability and damages, including:

☐ Certified Virginia Traffic Crash Report
☐ Photographs of vehicles, scene, and injuries
☐ Witness statements
☐ Complete medical records (authenticated)
☐ Itemized medical bills
☐ Wage loss documentation (IRS Form W-2 / 1099 / tax returns)
☐ Expert reports
☐ Declarations page
☐ Tortfeasor's coverage information

B. Bad Faith Exposure

Under Va. Code § 8.01-66.1(D), if [CARRIER_SHORT_NAME____] denies, refuses, or fails to pay this UM/UIM claim and a court later determines the conduct was not in good faith, the Company is exposed to:

• Up to double the judgment obtained against the tortfeasor, not to exceed $500,000;
• Reasonable attorney fees; and
• All costs and expenses.

Indicia of bad faith under Virginia law include unreasonable delay, inadequate investigation, "lowballing," failure to communicate, and compelling litigation. See CUNA Mut. Ins. Soc'y v. Norman, 237 Va. 33 (1989); Nationwide Mut. Ins. Co. v. St. John, 259 Va. 71 (2000).

C. Unfair Claim Settlement Practices — Va. Code § 38.2-510

Va. Code § 38.2-510 prohibits, as an unfair trade practice, the following conduct when committed with such frequency as to indicate a general business practice:

1. Misrepresenting pertinent facts or policy provisions;
2. Failing to acknowledge and act reasonably promptly upon communications;
3. Failing to adopt and implement reasonable standards for prompt investigation;
4. Refusing to pay claims without conducting reasonable investigation;
5. Failing to affirm or deny coverage within a reasonable time after proof of loss;
6. Not attempting in good faith to effectuate prompt, fair, and equitable settlement where liability is reasonably clear;
7. Compelling insureds to institute litigation by offering substantially less than the amounts ultimately recovered;
8. Attempting to settle for less than the amount to which a reasonable person would believe he or she was entitled; and
9. Failing to promptly provide a reasonable explanation for denial or compromise of a claim.

Violations may be reported to the Virginia State Corporation Commission, Bureau of Insurance.

IX. ARBITRATION / LITIGATION FORUM

A. Policy Arbitration Clause

The policy ☐ contains ☐ does not contain an arbitration clause for UM/UIM disputes. If arbitration is invoked, it shall be conducted pursuant to the Virginia Uniform Arbitration Act, Va. Code § 8.01-581.01 et seq.

B. Statute of Limitations

• Personal injury (underlying tort): 2 years from date of loss. Va. Code § 8.01-243(A).
• Contract action against UIM carrier: 5 years from breach. Va. Code § 8.01-246; Tate v. Colony House Builders, Inc., 257 Va. 78 (1999).
• Statutory bad faith under § 8.01-66.1: requires 45-day pre-suit notice.

C. Venue

Suit may be brought in the circuit court for the county or city where the cause of action arose or where the defendant insurer conducts business, pursuant to Va. Code § 8.01-262.

X. RESPONSE DEADLINE

This demand expires at 5:00 p.m. Eastern Time on [__/__/____], which is the 45th day following service of this notice under Va. Code § 8.01-66.1(C).

Consequences of Non-Response

If [CARRIER_SHORT_NAME____] fails to tender the full UM/UIM limits by the deadline:

1. We will file suit in the [COUNTY/CITY____] Circuit Court of Virginia;
2. We will pursue statutory bad faith damages under Va. Code § 8.01-66.1, including double the judgment (up to $500,000), attorney fees, and all costs and expenses;
3. We will file a formal complaint with the Virginia State Corporation Commission, Bureau of Insurance, P.O. Box 1157, Richmond, VA 23218 (Consumer Services: (804) 371-9741 or (877) 310-6560);
4. We will invoke arbitration if required under the policy;
5. We will seek punitive damages (capped at $350,000 per Va. Code § 8.01-38.1) if facts warrant.

XI. DOCUMENT PRESERVATION NOTICE

This letter constitutes formal notice to preserve all documents and electronically stored information relating to this claim, including the complete claim file, adjuster notes and diary entries, reserve information, internal communications, claims handling manuals, training materials, and all correspondence with insureds, experts, and defense counsel. Spoliation of such evidence may result in sanctions under Virginia law. See Jordan v. Sandwell, Inc., 189 F. Supp. 2d 406 (W.D. Va. 2002).

XII. CONCLUSION

This claim presents clear liability (with no contributory negligence defense available), catastrophic injuries, and damages far exceeding the available coverage. Under the post-2023 Virginia UIM statute and the post-July-1-2024 bad faith regime, [CARRIER_SHORT_NAME____] faces unprecedented exposure for any failure to act in good faith. We urge the Company to tender the full UM/UIM limits within the 45-day statutory notice period.

Respectfully submitted,

[LAW_FIRM_NAME________]

By: _______________________________
[ATTORNEY_NAME_____]
Virginia State Bar No. [____________]
[ADDRESS_____]
[CITY____], Virginia [ZIP__]
[PHONE__] | [EMAIL________]

Counsel for [CLIENT_NAME________]

ENCLOSURES:

• Declarations page and UM/UIM coverage provisions
• Virginia Traffic Crash Report (Form FR-300P)
• Certified medical records (Va. Code § 8.01-413)
• Itemized medical bills
• Photographs of vehicles, scene, and injuries
• Witness statements
• Wage loss documentation
• Expert reports (accident reconstruction, medical, vocational, economic)
• Tortfeasor's declarations page and liability settlement documents

CC:

• [CLIENT_NAME________]
• [TORTFEASOR_CARRIER____] (re: Va. Code § 38.2-2206(L) consent to settle)

VIRGINIA UM/UIM LAW QUICK REFERENCE

SOURCES AND REFERENCES

• Va. Code § 38.2-2206 (UM/UIM coverage), https://law.lis.virginia.gov/vacode/title38.2/chapter22/section38.2-2206/
• Va. Code § 8.01-66.1 (bad faith remedy), https://law.lis.virginia.gov/vacode/title8.01/chapter3/section8.01-66.1/
• Va. Code § 38.2-510 (unfair claim settlement practices), https://law.lis.virginia.gov/vacode/title38.2/chapter5/section38.2-510/
• Va. Code § 46.2-472 (financial responsibility limits), https://law.lis.virginia.gov/vacode/title46.2/chapter3/section46.2-472/
• Va. Code § 8.01-38.1 (punitive damages cap), https://law.lis.virginia.gov/vacode/title8.01/chapter3/section8.01-38.1/
• Va. Code § 8.01-243 (statute of limitations — personal injury), https://law.lis.virginia.gov/vacode/title8.01/chapter4/section8.01-243/
• Va. Code § 8.01-413 (records of health care providers), https://law.lis.virginia.gov/vacode/title8.01/chapter14/section8.01-413/
• Manu v. GEICO Cas. Co., 293 Va. 371 (2017)
• State Farm Mut. Auto. Ins. Co. v. Floyd, 235 Va. 136 (1988)
• A&E Supply Co. v. Nationwide Mut. Fire Ins. Co., 798 F.2d 669 (4th Cir. 1986)
• Acuar v. Letourneau, 260 Va. 180 (2000) (collateral source rule)
• Virginia State Corporation Commission, Bureau of Insurance, https://scc.virginia.gov/pages/Bureau-of-Insurance