
At Frogale Law, a dedicated personal injury law firm in Alexandria, Virginia, we understand how frustrating it can be when insurance companies delay or deny valid claims. For too long, Virginia policyholders have lacked strong legal tools to hold insurers accountable for bad faith practices. But that changed with the recent amendment to Virginia Code § 8.01-66.1. This new insurance bad faith law empowers policyholders and ensures fair treatment from insurance companies. Let’s dive into what this new law means for you.
What Is Insurance Bad Faith?
Insurance bad faith occurs when an insurance company fails to act honestly and fairly toward its policyholders. This can include:
- Unreasonable Denial of Claims: Refusing to pay a valid claim without a legitimate reason.
- Delaying Payment: Purposefully dragging out the claims process to avoid payment.
- Failure to Investigate: Not properly investigating a claim before denying it.
- Lowball Offers: Offering significantly less compensation than what is fair.
Before this new law, Virginia was one of the few states where policyholders had limited recourse against bad faith insurers. Policyholders often faced uphill battles when seeking the compensation they were rightfully owed. The amendment to Virginia Code § 8.01-66.1 changes that.
Key Changes in Virginia Code § 8.01-66.1
The updated statute now allows policyholders to hold insurance companies accountable for acting in bad faith. Here are the critical updates:
- First-Party Claims: The new law specifically addresses first-party claims. This means if you file a claim with your own insurance company (like under uninsured/underinsured motorist coverage), your insurer must handle your claim fairly and in good faith.
- Reasonable Settlement Demands: If a policyholder makes a reasonable settlement demand within policy limits and the insurer refuses without a valid reason, the insurer can be liable for the full amount of the judgment, even if it exceeds policy limits.
- Attorney’s Fees and Costs: Courts can now award attorney’s fees and litigation costs to policyholders if they prove the insurer acted in bad faith. This levels the playing field for individuals who might otherwise be intimidated by the cost of legal action.
- Interest Penalties: The law also allows courts to impose interest penalties on insurers who delay payments without justification. This is a strong incentive for insurers to resolve claims promptly.
How This Law Benefits Policyholders
For Virginia residents, the amended law is a significant step forward. Here’s how it benefits you:
- Accountability: Insurance companies can no longer hide behind legal loopholes to delay or deny valid claims.
- Faster Resolutions: With the threat of penalties, insurers are more likely to resolve claims promptly.
- Fair Settlements: Policyholders have more leverage to negotiate fair settlements without being forced into lowball offers.
- Legal Support: The possibility of recovering attorney’s fees makes it easier for individuals to pursue justice without worrying about out-of-pocket legal costs.
Real-Life Scenarios Impacted by the New Law
Consider these examples to understand how Virginia’s new insurance bad faith law can help:
- Car Accidents: Imagine you’re injured in a car accident caused by an uninsured driver. You file a claim under your uninsured motorist coverage, but your insurer delays payment for months, offering a settlement far below your medical expenses. Under the new law, you can hold the insurer accountable for this bad faith behavior and potentially recover attorney’s fees.
- Medical Payments Coverage: If your medical payments coverage claim is unfairly denied or delayed after an accident, the new law gives you stronger grounds to challenge the insurer’s decision.
What This Means for Personal Injury Victims
At Frogale Law, we focus on helping personal injury victims in Alexandria and throughout Virginia. This new law is especially relevant for clients injured in car accidents, slip and fall incidents, and other personal injury cases. When dealing with an insurer—whether your own or the at-fault party’s—you now have stronger protections against unfair claim practices.
If an insurance company refuses to settle your claim reasonably, we can use Virginia Code § 8.01-66.1 to pursue not only your damages but also attorney’s fees and penalties against the insurer. This added leverage can significantly impact the outcome of your case.
Why You Need an Experienced Personal Injury Attorney
Navigating an insurance claim is complex, and insurers have teams of lawyers working to protect their bottom line. That’s why you need an experienced personal injury attorney who understands the nuances of Virginia’s insurance laws.
At Frogale Law, we know how to:
- Identify Bad Faith Tactics: We recognize when insurers are acting in bad faith and know how to build a strong case against them.
- Maximize Compensation: We fight for every dollar you deserve, ensuring that insurers pay what they owe.
- Hold Insurers Accountable: We leverage the new law to seek attorney’s fees and interest penalties when insurers act unfairly.
Contact Frogale Law for Help with Insurance Claims
If you believe your insurance company is acting in bad faith, don’t wait. Contact Frogale Law today. We offer free consultations to discuss your case and explain how Virginia’s new insurance bad faith law can help you get the compensation you deserve.