Virginia Personal Auto & Homeowners Surprises?

Dec 4, 2018

  1. Tcollins

    Tcollins Expert

    Likes Received:
    Hi all,

    I'm reaching out to see if there is anyone out there with personal lines experience in Virginia. I'm asking because I've been researching the standard coverage and requirements in different states, and there have been some "surprises" that are not explained very well on the government department of insurance websites.

    A perfect example is when I was researching Pennsylvania personal auto.. I spent several weeks learning all about their "First Party Benefits" coverage options, and limited vs. full tort, stacking UM, etc. Well, after researching all of these coverage options and requirements for PA, much later I found out about all of these forms that the client needs to sign (related to those first party benefits, tort coverage, uninsured motorist coverage selection, etc.). I had no idea about these forms, but the carriers require that these forms be filled out correctly and submitted, otherwise all of the coverage gets set to the maximum amount and the client's premium goes up.

    So, that being said, does anyone have experience with personal auto or homeowners insurance in Virginia that could shed light on any "surprises" I should be aware of?

    For personal auto, I understand that Virginia has "contributory negligence" laws, stackable medical payments coverage and stackable UM.

    Does anyone know of any other personal auto or homeowners regulations or standards that are also important in the state of Virginia? Thank you for taking the time - very much appreciated.
  2. fed up

    fed up Guru

    Likes Received:
    No surprises with Virginia auto or property. Of course that can depend on the carrier as well. Focus on Vermont, get really good at Vermont, and then add in New Hampshire, Massachusetts and Maine. I live in Virginia but work in Maryland. Asking people what town a certain street is located in raises some eyebrows. Asking someone in Virginia questions from your base in Vermont might get you disconnected. You know nothing about the different zip codes, inside or outside of the beltway. Mispronounce Staunton Virginia and you have lost the sale
    fed up, Dec 4, 2018
  3. geneseehill

    geneseehill New Member

    Likes Received:
    I've handled a few claims in PA a few years back. Heres what I remember/recall. Many insureds purchase the limited tort option given the price differential. That option is very rarely spelled out to them correctly and when it comes time to make a claim for general damages or pain & suffering are surprised the are not entitled to general damage recovery. They will be entitled to recovery if they suffer permanent disability of say 5% (this part I don't recall exactly but it is a small/nominal figure). They many times hire personal injury attorneys who use office administrators to direct treatment and are surprised to find out that the "Limited Tort" option was chosen by their client. At this point they need to either drop the client or go full bore and search for a third party medical provider who will provide a permanent disability rating in order to pursue a contingent recovery.

    In short, its much easier as an agent/producer to just blanket insure all clients with "Full Tort" coverage then to risk an E&O exposure by not adequately explaining the difference as well as keeping a rejection form that is both timely & informative. There also could be issues when there is a material change in the policy (lowering coverage limits, removing a co-insured name {through death, divorce or disability}) which could require a new set of signatures for the coverage reduction or exclusion to be valid.

    I had a case similar to this in Washington State over 15 years ago where an insured moved from out of state to Washington. (Her husband died)-She sustained a severe Underinsured Motorist Bodily Injury claim. The out of state coverage rejection forms were not valid in Washington per counsel coverage analysis. She was extended Underinsured Motorist Bodily Injury benefits with the understanding she would be backcharged for the premium. Ironically, 18 months later she had another UMBI claim and nothing had been done by our crack underwriting dept. and she was entitled to UMBI benefits once again. Perfect example of non-cooperation between company departments (I think they were more eager to merge underwriting platforms between two companies at the time). The result was that the insured obtained 100k worth of UMBI benefits between the two losses without ever having to pay for the coverage. The firt loss was severe and the 2nd loss exacerbated the first set of conditions to the point that it was difficult to discerne what the permanent partial disability of the two events, only the result. It was determined to extend full 50K UMBI benefits in each in order to stave off any potential "Bad Faith" recovery over those limits once the insureds attorney sent a policy limits demand. I believe we settled with a "Policy Release" at that point in order to stave on any other potential form of recovery.

    FYI--the insured had moved to Washington State from the east coast and I was able to obtain the old rejection form directly from the agents office. However, when she moved to WA State the carrier took over the handling of the policy as she went from an agency option to Carrier Direct. Thus, the Carrier (Nationwide) missed the requirement for new rejection forms instead relying on the old, outdated ones obtained by the east coast agency.
    Last edited: Dec 4, 2018