2023 Car Insurance Law Updates
The fine print insurance companies don’t want you to read.
Beginning July 1st, 2023, a change to Virginia car insurance law took effect that will impact millions of drivers in the Commonwealth – and the insurance companies don’t want you to know about it. Many Virginians with policies set to renew this year have already received letters from their carrier asking them to sign a form waiving their right to critical insurance coverage.
The Real Story on the New Car Insurance Law Effective July 1, 2023
The new order of law pertaining to car insurance coverage, Virginia Code § 38.2-2206, went into effect July 1st, 2023.
Here is how State Farm Insurance worded letters to their policyholders about their upcoming renewal:
“Effective July 1, 2023, Virginia law requires all motor vehicle liability insurance policies to provide underinsured motorist coverage that pays any covered damages due to an insured in addition to any property/bodily injury that is applicable to the insured damages. As such, this new coverage will be applied to your policy at your upcoming renewal with limits equal to your bodily injury and property damage liability coverage and your premium will be adjusted for the increased protection it provides. You have the right to select limits for uninsured motorist coverage that are less than the bodily injury and property damage liability limits by signing this form.”
This has always been the case. When you select less car insurance coverage, you will pay less in premiums.
This is How Car Insurance Companies are Getting You to Opt-out of Coverage You Are Paying For
In the next paragraph, State Farm explains how you can opt out of coverage you ARE paying for.
“You also have the right to reject or refuse the protection provided by this new coverage by selecting uninsured motorist coverage alternative coverage (U) which provides that damages caused by an accident with an underinsured motor vehicle may be reduced by any bodily injury liability coverage or property damage liability coverage available for payment. This can be done by signing an uninsured/underinsured motorist selection rejection form.”
The Bottom Line on the 2023 Car Insurance Law Changes
Virginia lawmakers passed a law removing credits or “offsets” in car insurance damages paid to claimants. This change was made to ensure policyholders who have been injured in a car accident are able to use the full amount of their coverage to recoup damages. In short form, you can now use your own car insurance policy if the person who hit you does not have the coverage needed to cover the damages after an accident.
In a recent interview for WTKR News3, Brother Rutter explains the changes to the laws and how it could impact drivers. While the insurance company says the rates are going to increase, a recent study on car insurance rates in the US shows virtually no increase in VA, year over year, and some of the lowest rates in
the country. In fact, in the last decade, the average Virginia driver has seen a rate increase of less than $200 from 20
11-20211, despite the increase in vehicle replacement costs an d average vehicle repair cost being among the highest in the US.2
It’s Insurance Coverage You Are Already Paying For – Why Sign It Away?
The offset, or credit, the law previously allowed meant insurers were often left with unpaid expenses while insurance companies collected premiums for the coverage. Virginia lawmakers decided to end the unfair laws, which could equal millions of dollars in payments for the insurance company – unless you sign their form. If that happens, you could lose thousands after an accident with an uninsured or underinsured driver.
If you have a car insurance policy renewing in 2023, make sure you read their information closely. You don’t want to end up paying for coverage you can’t use when you need it most.
Insurance Companies Must Tell the Truth…Right? WRONG!
If you have been injured in a car accident, the insurance company will likely make you an offer right away. They may tell you they are offering you the full amount of the policy and that is all the coverage that is available. That may not be true. There may be options to use your own insurance or the policies of other people living in your house to cover damages like medical bills, property loss, lost wages, and more.
Read more about the coverage you may not know you have.
Questions About Your Coverage After a Car Accident?
If you or someone you love has been injured by an accident involving an uninsured or underinsured driver, speak with our car accident experts today. They will review your policies and help determine the full amount of compensation available to you. Before you sign anything with the insurance company, make sure you are getting the whole truth.
1State of Car Insurance 2022, Page 44 Appendix A1
2Where Do Car Repairs Cost The Most; Sept 9, 2023, by Market Watch Guides