Simplifying the concept appears to have worked in the initial wrangling over House Bill 93, the effort by personal injury attorneys to streamline cases in which the primary insurer pays its policy limits and additional underinsurance coverage is available for the plaintiff.
The attorneys long have complained that settlement of such cases gets dragged out needlessly because the UIM carrier has little incentive to resolve them promptly.
Typically, the insurer for the defendant won’t pay its limits unless it receives an agreement from the UIM carrier to give up its right to reimbursement from the defendant.
If the plaintiff and his UIM carrier can’t agree and the case is tried, the defendant’s insurer is stuck with the cost of defending the case even though it has paid its limits.
Under the bill, introduced on behalf of the Virginia Trial Lawyers Association by Del. Terry G. Kilgore, R-Gate City, if the defendant’s insurer offers its limits in writing and irrevocably, the defendant’s insurer still has the responsibility to defend him, but the UIM carrier must pay the defense costs if it chooses to litigate the case further.
Lobbyists for eight insurers told the civil subcommittee of the House Courts of Justice Committee yesterday that the legislation attempts to address a situation that occurs infrequently and will have the effect of shifting the cost of insurance from those who buy minimal coverage to the 80 percent of drivers who buy more than the minimum.
Subcommittee members with a personal injury background responded that the problem was bigger than the opponents suggested.
And, as Del. Manoli Loupassi, R-Richmond, put it, it only makes sense for the party “with skin in the game” to bear the cost of the litigation. The subcommittee reported the bill to the full committee without a dissenting vote.
By Alan Cooper