A Quick Look Under the Hood: Uninsured/Underinsured Motorist Coverage in Virginia
Often the wrongdoer (the “tortfeasor”) who causes injuries does not have enough insurance coverage (or perhaps even any coverage) to pay the full amount of the damages a wrongdoer has caused to an innocent victim (the “plaintiff”). Fortunately, in the context of injuries arising out of the ownership, maintenance, or use of a motor vehicle, Virginia law establishes an additional source of insurance coverage applicable to the innocent victim through the victim’s own auto policy, an auto policy applicable to the vehicle in which the victim was riding, and/or an auto policy applicable to a relative with whom the victim was living.
Virginia law mandates that every motor vehicle insurance policy issued or delivered in Virginia must include a few distinct types of coverage. If an insured person causes damage to others, then there is liability coverage to assist the insured person in compensating the injured person. See Va. Code § 38.2-2204. And when the insured person is also the injured person, then there is uninsured motorist (UM) coverage and underinsured motorist (UIM) coverage to assist the insured person in being compensated themselves. See Va. Code § 38.2-2206.
The latter two types of coverage are referred to collectively as UM/UIM coverage. The UM/UIM coverage does not insure the wrongdoer. Rather, it insures the insured (the injured person) against inadequate compensation from the wrongdoer. Horne v. Superior Life Ins. Co., 203 Va. 282, 285 (1962).
In other words, when the wrongdoer does not have sufficient liability coverage to pay the damages she caused, the victim’s own insurance coverage steps in to help pay for the damages caused by the wrongdoer. UM coverage is implicated in any one of several scenarios: (1) the tortfeasor has no liability insurance, (2) the tortfeasor has liability insurance with policy limits that are less than the amount of coverage required in Virginia, (3) the tortfeasor is immune from liability, (4) the tortfeasor is unknown, or (5) the tortfeasor’s insurance carrier denies liability coverage for any reason. See Va. Code § 38.2-2206(B)(1). UIM coverage is triggered when the tortfeasor has some available insurance coverage but the amount of that insurance coverage is not sufficient to pay all of the wrongdoer’s liability for the plaintiff’s damages. See id.
Significantly, the persons insured under a motor vehicle insurance policy are not limited to the vehicle owner to whom the policy was issued. The applicable Virginia law defines “insured” much more broadly, and provides: “Insured” . . . means [1] the named insured and, while resident of the same household, [2] the spouse of the named insured, and [3] relatives, [4] wards or foster children of either, while in a motor vehicle or otherwise, and [5] any person who uses the motor vehicle to which the policy applies, with the expressed or implied consent of the named insured, and [6] a guest in the motor vehicle to which the policy applies[.] Va. Code § 38.2-2206(B) (bracketed numbers & emphasis added).
The types of insureds listed on either side of the emphasized “and” in the above-quoted statute are not treated the same. Instead, the first four types of insureds (numbers 1 to 4) are referred to as “first class insureds” and the last two types of insureds (numbers 5 and 6) are referred to as “second class insureds.” The different treatment of the two classes of insureds is summarized as follows: The UM/UIM statute provides “different benefits accruing to each class.” Cunningham v. Insurance Co. of N. Am., 213 Va. 72, 75, 189 S.E.2d 832, 834 (1972). For insureds in the first class, UM/UIM coverage follows them wherever they go, whether in or out of a covered vehicle. See Insurance Co. of N. Am. v. Perry, 204 Va. 833, 836, 134 S.E.2d 418, 420 (1964) (decided under predecessor statute). Those in the second class, however, have more limited coverage. To be covered, an accident must take place while they are either “using,” with the named insured’s consent, a vehicle specifically covered by the policy or while they are a guest within a covered vehicle. Id. at 837, 134 S.E.2d at 421.
Bratton v. Selective Ins. Co. of Am., 290 Va. 314, 335, 776 S.E.2d 775, 786 (2015) (Kelsey, J., dissenting).
For first-class insureds, UM/UIM “coverage is designed to protect not vehicles, but persons .
. . . Thus, the emphasis is upon the status of an insured when injured, rather than upon vehicles, in determining whether coverage applies.” Lipscombe v. Security Ins. Co., 213 Va. 81, 83-84, 189 S.E.2d 320, 323 (1972), superseded by statute in part on other grounds as stated in Allstate Ins. Co. v. Wade, 265 Va. 383, 579 S.E.2d 180 (2003).
For a first-class insured, UM/UIM coverage applies regardless of whether the plaintiff was in an auto explicitly mentioned in the policy. See, e.g., Virginia Farm Bureau Mut. Ins. Co. v. Williams, 278 Va. 75, 78, 677 S.E.2d 299, 300 (2009) (minor plaintiff was injured in a motor vehicle crash and “qualified as an insured of the first class under her father’s automobile insurance policy . . . [which] provides coverage for three separate vehicles, none of which was involved in the accident”); Allstate Ins. Co. v. Meeks, 207 Va. 897, 153 S.E.2d 222 (1967) (while plaintiff was driving an uninsured vehicle he owned plaintiff suffered injuries in a collision with another uninsured motorist; court held that plaintiff, as a first class insured, was entitled to recover under the UM provision of his policy which insured another car plaintiff owned.
In fact, a first-class insured is entitled to UM/UIM coverage even when they are not using or occupying a vehicle, provided, however, that they are injured by the ownership, maintenance, or use of a motor vehicle. See Va. Code § 38.2-2206(B) (“while in a motor vehicle or otherwise”) (emphasis dded). For instance, a pedestrian walking on the sidewalk struck by a motor vehicle leaving the roadway could obtain UM/UIM coverage under his own auto insurance policy. See, e.g., Insurance Co. of N. Am. v. Perry, 204 Va. 833, 134 S.E.2d 418 (1964). The first class insured is covered wherever the insured may be. The policy insuring the first class insured is “glued” to his/her person.
There is often debate about whether someone is a “resident of the same household” as the named insured. Determining a person’s residence requires an intent manifested by actions. See Allstate Ins. Co. v. Patterson, 231 Va. 358, 344 S.E.2d 890 (1986). The household component entails one or more persons collectively living as a single unit under the same roof. See Phelps v. State Farm Mut. Auto Inc. Co., 245 Va. 1, 426 S.E.2d 484 (1993). In certain limited situations, these concepts stretch to make practical sense. See, e.g., id. (college student living away from home still considered resident of family household); Nationwide Mut. Ins. Co. v. Robinson, 36 Va. Cir. 193 (City of Richmond Cir. Ct. 1995) (teenager, over whom divorced parents had joint custody and who had a room at each of his parent’s separate homes, as deemed a resident of each parent’s home).
For second-class insureds, by contrast, coverage requires use of an expressly covered vehicle. See Cunningham v. Insurance Co. of N. Am., 213 Va. 72, 76, 189 S.E.2d 832, 835 (1972) (“To be insured, [second class insureds’] . . . coverage is tied to and limited to actual occupancy of a particular automobile [expressly listed in the policy].”) (quoting out-of-state opinion).
Also in the second-class situation, the named insured must give permission (express or implied) to the plaintiff to use the covered vehicle. Notably, however, such permission can be second-hand or once removed. See GEICO v. USAA, 281 Va. 647, 657, 708 S.E.2d 877, 883 (2011) (“When a named insured entrusts a car to another for his general use, the person so entrusted—i.e., the first permittee—also may permit a third person to use the car—i.e., the second permittee. In such instances, we have held that the second permittee has the implied
permission of the named insured to use the vehicle.
. . . [such that t]he second permittee then is covered under the policy of the named insured.”). Provided, however, that the permissive use of the vehicle must have been within the scope of the permission given at both levels of the entrustment. See id., 281 Va. at 658-59, 708 S.E.2d 883-884. Accordingly, if the owner gives permission to Batman to drive the car, but explicitly prohibits Robin from driving the car, then Robin would not be an insured if he was driving the vehicle at the time of the crash.
However, if a person has permission to use the vehicle then there is coverage notwithstanding a failure to abide by any instruction about the manner of using the vehicle. See City of Norfolk v. Ingram, 235 Va. 433, 437, 367 S.E.2d 725, 727 (1988) (there cannot be any “loss of omnibus coverage because the bailee operated the owner’s car in a manner violating the owner’s instructions”) (emphasis in original). For example, even if the owner directs the driver not to drive drunk, a drunk driver would be an insured.
The requisite “use” of a vehicle for second-class UM/UIM coverage has been broadly construed such that it is not limited to driving or riding in the vehicle. See, e.g., Newman v. Erie Ins. Exch., 256 Va. 501, 507 S.E.2d 348 (1998) (crossing street to board school bus); Edwards v. GEICO, 256 Va. 128, 500 S.E.2d 819 (1998) (changing tire on parked car); Slagle v. Hartford Ins. Co. of the Midwest, 267 Va. 629, 594 S.E.2d 582 (2004) (standing outside giving hand signals to driver); Bratton, Adm’r v. Selective Ins. Co. of Am., 290 Va. 314, 776 S.E.2d 775 (2015)
(placing truck with flashing lights as a buffer to protect roadside workers).
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