News & Insights

Changes in Virginia Law Regarding Improving UM/UIM Coverage


January 31, 2023

Virginia recently passed a law to improve insurance coverage for automobile policies. The change will take effect in the UM/UIM coverage of all policies issued or renewed after July 1, 2023.


“UM/UIM” stands for “uninsured/underinsured” and is often shortened to just “UIM.” UIM coverage provides you with additional insurance coverage if you are injured in an accident when the person who caused the accident does not have enough liability insurance coverage to pay for your damages. UIM coverage has a limit, which is the maximum amount that it will pay out. You choose what your limit is when you buy your policy.Car Accident

Prior to July 2023, all auto policies issued in Virginia calculated UIM coverage like this: the other policy’s liability coverage limit would be subtracted from your UIM coverage limit to determine how much your policy would pay. That means, you could only get UIM coverage if the limit of your UIM coverage was more than the limit of the liability coverage of the person who caused the accident. For example, if your UIM limit was $200,000 and the other party’s liability limit was $50,000, you would subtract the other party’s $50,000 liability limit from your $200,000 UIM limit to get $150,000, and that would be the amount that your policy would pay. Between both policies, however, you would receive your UIM coverage limit of $200,000. (This assumes that the value of your claim is worth this much.)

The new law changes UIM coverage so that both parties’ coverage is added, or “stacked.” In our example, instead of subtracting, you would get the full amount of your $200,000 UIM coverage, which you could add to the other party’s $50,000 limit for a total of $250,000. (This assumes that the value of your claim is worth this much.) As you can see, stacking provides a huge benefit if you are injured in a car crash by providing more coverage for your medical expenses, lost wages, pain, and mental anguish.

Starting July 1, your insurance company may offer you an incentive to opt out of this new law by asking you to reduce or eliminate your UIM coverage. Before you sign this election, please note that you are signing away some important rights if you are the victim of an automobile accident. By electing to reduce your premium, your policy will revert to the pre-July 2023 “anti-stacking” law, and you will have given up resources that you may need in the event of an accident.

If you have any questions or concerns, it is best to consult with your insurance agent or an attorney.