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1996 SESSION
963485252Patrons-- Deeds, Armstrong, Jones, J.C., Kilgore, McEachin, Mims and Woodrum
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 $1,000 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, plus interest on this
amount at 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.
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 $1,000 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 $1,000 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
court 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, plus
interest on this amount at 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.
C. Notwithstanding the provisions of subsections A and B above, 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 $1,000 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, plus interest on this amount at 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.
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
$1,000 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.