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2002 SESSION
Be it enacted by the General Assembly of Virginia:
1. That § 8.01-66.1 of the Code of Virginia is amended and reenacted as follows:
§ 8.01-66.1. Remedy for arbitrary refusal of motor vehicle insurance claim.
A. Whenever any insurance company licensed in this Commonwealth to write
insurance as defined in § 38.2-124 denies, refuses or fails to pay to its
insured a claim of $2,500 $3,500 or less in excess of the deductible, if any,
under the provisions of a policy of motor vehicle insurance issued by such
company to the insured and it is subsequently found by the judge of a court of
proper jurisdiction that such denial, refusal or failure to pay was not made in
good faith, the company shall be liable to the insured in an amount double the
amount otherwise due and payable under the provisions of the insured's policy
of motor vehicle insurance, together with reasonable attorney's fees and
expenses.
The provisions of this subsection shall be construed to include an insurance
company's refusal or failure to pay medical expenses to persons covered under
the terms of any medical payments coverage extended under a policy of motor
vehicle insurance, when the amount of the claim therefor is $2,500 $3,500 or
less and the refusal was not made in good faith.
B. Notwithstanding the provisions of subsection A, whenever any insurance
company licensed in this Commonwealth to write insurance as defined in §
38.2-124 denies, refuses or fails to pay to a third party claimant, on behalf
of an insured to whom such company has issued a policy of motor vehicle
liability insurance, a claim of $2,500 $3,500 or less made by such third party
claimant and if the judge of a court of proper jurisdiction finds that the
insured is liable for the claim, the third party claimant shall have a cause of
action against the insurance company. If the judge finds that such denial,
refusal or failure to pay was not made in good faith, the company, in addition
to the liability assumed by the company under the provisions of the insured's
policy of motor vehicle liability insurance, shall be liable to the third party
claimant in an amount double the amount of the judgment awarded the third party
claimant, together with reasonable attorney's fees and expenses.
C. Notwithstanding the provisions of subsections A and B whenever any person
who has paid a fee to the Department of Motor Vehicles to register an uninsured
motor vehicle pursuant to § 46.2-706 or any person who has furnished proof of
financial responsibility in lieu of obtaining a policy or policies of motor
vehicle liability insurance pursuant to the provisions of Title 46.2 or any
person who is required and has failed either to pay such fee or to furnish such
proof pursuant to the provisions of Title 46.2 denies, refuses or fails to pay
to a claimant a claim of $2,500 $3,500 or less made by such claimant as a
result of a motor vehicle accident; and if the trial judge of a court of proper jurisdiction finds
that such denial, refusal or failure to pay was not made in good faith, such
person shall be liable to the claimant in an amount double the amount otherwise
due and payable together with reasonable attorney's fees and expenses.
For the purposes of this subsection C "person" shall mean and include any natural person, firm, partnership, association or corporation.
D. 1. Whenever a court of proper jurisdiction finds that an insurance company
licensed in this Commonwealth to write insurance as defined in § 38.2-124
denies, refuses or fails to pay to its insured a claim of more than $2,500
$3,500 in excess of the deductible, if any, under the provisions of a policy of
motor vehicle insurance issued by such company to the insured and it is subsequently
found by the judge of a court of proper jurisdiction that such denial, refusal
or failure to pay was not made in good faith, the company shall be liable to
the insured in the amount otherwise due and payable under the provisions of the
insured's policy of motor vehicle insurance, plus interest on the amount due at
double the rate provided in § 6.1-330.53 from the date that the claim was
submitted to the insurer or its authorized agent, together with reasonable
attorney's fees and expenses.
2. The provisions of this subsection shall be construed to include an insurance company's refusal or failure to pay medical expenses to persons covered under the terms of any medical payments coverage extended under a policy of motor vehicle insurance when the refusal was not made in good faith.