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Virginia Legislature Advances Bill that would Increase Insurers’ Obligation to Act in Good Faith

The Virginia House of Delegates' Courts of Justice Committee: Civil Subcommittee advanced SB 256 with 8 votes in favor and none opposed. It passed the full state senate on a 25-15 vote.

If enacted into law, SB 256 would obligate auto insurance companies to make claims decisions in good faith. Insurers would have to pay double a court's judgement - plus interest, attorney fees, and other related expenses - if the court finds that an insurer - acting in bad faith - "rejects a reasonable settlement demand made by the insured within the policy's coverage limits for uninsured or underinsured motorist benefits or fails to respond within a reasonable time after being presented with such demand after the insured has become legally entitled to recover."

Currently in Virginia, insurance companies are not required to make decisions in good faith under these circumstances, as determined by a 2017 court case.

Click here to read the full legislation. 

Click here to watch the most recent subcommittee hearing at which SB 256 was deliberated and advanced.