§ 8.01-66.1:1.Subrogation claims by underinsured motorist benefits insurer.

Section 8.01-66.1:1 governs when an underinsured motorist benefits insurer can pursue the person who settled with its insured. Under subsection A, an insurer that pays UIM benefits — whether by settlement or under a judgment — generally has no right of subrogation against whoever settled with the insurer’s insured under subsection K of § 38.2-2206. The insurer regains that right only if the underinsured motorist failed to reasonably cooperate in defending any lawsuit brought against him. The statute presumes non-cooperation if the underinsured motorist fails or refuses to attend a deposition or trial after being subpoenaed at least 21 days in advance, to assist in responding to written discovery, to meet with defense counsel for a reasonable time after reasonable notice, or to notify counsel of an address change. The motorist can rebut that presumption, and if the court finds the failure to cooperate was not unreasonable, or that the motorist otherwise acted in good faith trying to cooperate, the insurer does not regain its subrogation right.

Subsection B requires the insurer seeking that cooperation to pay the reasonable costs and expenses of procuring it, including travel costs if the underinsured motorist lives more than 100 miles from where the deposition or trial takes place; those travel costs feed back into whether the court considers the motorist’s failure to cooperate unreasonable.

Subsection C rewards a cooperating motorist: if the court finds the motorist satisfied the duty to cooperate, or that the failure to do so was not unreasonable, the court may award the motorist the costs of defending the subrogation action, including reasonable attorney fees.