Virginia UM/UIM Coverage Rules: Mandatory Limits, Stacking, and Producer Obligations

Uninsured and underinsured motorist coverage is not optional in Virginia. Every auto liability policy issued in the Commonwealth must include UM/UIM coverage by default, at limits matching the policy's liability limits, unless the policyholder explicitly rejects specified coverage in writing. The rules governing Virginia UM/UIM are layered across multiple statutory provisions and have been significantly updated in the past two years. A producer who cannot explain the mandatory nature of UM/UIM, the stacking rule, the rejection procedures, and the minimum coverage requirements is not fully equipped to advise Virginia auto clients. This post consolidates all of these rules into a single, current reference.

UM/UIM Is Mandatory — With Conditions

Under Va. Code § 38.2-2202 and related provisions, Virginia auto liability insurance policies must include:

Uninsured motorist (UM) coverage — mandatory, cannot be rejected. UM coverage protects the insured when they are injured by a driver who has no insurance at all. This coverage is required and cannot be waived or rejected by the policyholder.

Underinsured motorist (UIM) coverage — required to be offered at the same limits as the liability coverage, but can be rejected in writing. The default is that UIM equals the liability limits; the policyholder must sign a specific written rejection form to carry UIM at different limits or to decline UIM benefits beyond the UM amount.

This distinction matters: UM cannot be rejected; UIM can be modified by written rejection but is automatically included unless rejected.

The Minimum UM/UIM Coverage Amounts

Effective January 1, 2025, UM/UIM minimum coverage tracks the new liability minimums:

A policyholder can carry UM/UIM limits above the minimums — and given the stacking rule, doing so is now more valuable than it was before July 2023.

The Stacking Rule: Post-July 2023

As established in Va. Code § 38.2-2206 (effective July 1, 2023), UIM coverage now adds on top of the at-fault driver's liability payout rather than being offset by it. The rule applies automatically to all policies issued or renewed after July 1, 2023.

How it works:

At-fault driver has $50,000 liability coverage

Injured victim has $100,000 UIM coverage

At-fault driver's insurer pays $50,000

Victim's UIM coverage pays an additional $100,000

Total compensation available: $150,000

Written rejection of stacking: Policyholders can reject UIM stacking in writing. This returns the policy to the old offset system — UIM pays only the difference between the at-fault driver's liability payment and the UIM limit, not the full UIM limit on top.

The Insurer's Obligation When Limits Differ

Virginia law requires UM/UIM to match liability limits by default — but the policyholder can select different UM/UIM limits in certain circumstances with a written rejection form. If the policyholder increases their liability limits above UM/UIM (carrying $100,000/$300,000 liability with $50,000/$100,000 UM/UIM), the policyholder must sign a specific form documenting the difference. This requirement protects policyholders from inadvertently having gaps between their liability and UM/UIM coverage.

FR-44 and SR-22: How They Interact with UM/UIM

FR-44 policies (required for DUI convictions) mandate 100/200/50 liability coverage — double the standard minimums. Because UM/UIM must match liability limits by default, FR-44 policies also carry the higher UM/UIM baseline. A policyholder under FR-44 who rejects higher UM/UIM down to the standard 50/100/25 must do so with a written rejection form.

SR-22 policies (required for other violations) simply certify the driver carries the standard minimum 50/100/25 — no enhanced liability or UM/UIM minimums apply unless the policyholder carries higher limits voluntarily.

The 11.9% Uninsured Driver Problem

Virginia's Insurance Information Institute data estimates approximately 11.9% of Virginia drivers are uninsured despite the mandatory insurance requirement that took effect July 1, 2024. While the mandatory insurance requirement is expected to reduce this figure over time, it remains significant. UM coverage — which cannot be rejected — is the direct financial protection against this population. Producers should emphasize to clients that UM coverage is not a technicality: over 1 in 10 Virginia drivers may still be uninsured when an accident occurs, and UM coverage is the only contractual protection available.

Producer Obligations

Virginia's unfair trade practices statute (Title 38.2, Chapter 5) and the general duty of producer competence create practical obligations around UM/UIM advisory:

Explaining the default UM/UIM inclusion and why it exists

Explaining the stacking benefit and the consequences of signing a rejection waiver

Confirming that UM/UIM limits are appropriate relative to the client's exposure — particularly for clients with significant assets or income

Documenting coverage discussions, particularly when a client declines higher UM/UIM limits after being advised of the risks

Producers who recommend that clients sign UIM stacking rejection forms to save premium without explaining what coverage they are surrendering may face professional and regulatory scrutiny if the client later suffers an underinsured accident.

Frequently Asked Questions

Can a Virginia policyholder decline UM coverage entirely?

No. UM coverage in Virginia is mandatory and cannot be declined or waived. Every Virginia auto liability policy must include uninsured motorist coverage. The policyholder can select UM limits above the minimum but cannot carry zero UM coverage. This requirement reflects Virginia's recognition that approximately 10–12% of its drivers may not carry insurance, creating a direct risk to every other driver that UM coverage addresses. UIM coverage — which applies when the at-fault driver has insurance but not enough — can be rejected in writing, though the default is inclusion at matching liability limits.

What happens if a Virginia driver is injured by an uninsured hit-and-run driver?

A hit-and-run driver is treated as an uninsured motorist under Virginia law. The victim's UM coverage responds to hit-and-run accidents, subject to policy conditions including: the accident must be reported to law enforcement within a specified period, and the victim must cooperate with the insurer's investigation. Physical contact between the victim's vehicle and the hit-and-run vehicle is typically required for a UM property damage claim (to prevent fraudulent "phantom vehicle" claims), but bodily injury UM claims may not require physical contact depending on specific policy language and factual circumstances. Producers should confirm the specific UM hit-and-run conditions with each carrier.

If a Virginia driver has both UM and UIM coverage, when does each apply?

UM coverage applies when the at-fault driver has no insurance at all — including hit-and-run drivers. UIM coverage applies when the at-fault driver has insurance but not enough to cover the victim's full damages. In Virginia, both coverages must be offered at matching liability limits. After the 2023 stacking change, UIM coverage adds on top of the at-fault driver's liability payment rather than being offset by it. A severely injured victim could theoretically exhaust both the at-fault driver's liability coverage and then collect their full UIM limit on top — providing significantly higher total compensation than was available before the stacking change.

Does Virginia UM/UIM coverage apply to injuries sustained while a passenger in another vehicle?

Yes — Virginia UM/UIM coverage typically extends to the named insured and residents of the household while they are passengers in another vehicle, subject to the policy's definitions of "covered persons." The insured's own UM/UIM coverage can respond when they are injured as a passenger if the vehicle they are riding in is involved in an accident with an uninsured or underinsured driver. The priority of coverage (which policy pays first — the vehicle owner's or the passenger's own UM/UIM) depends on specific policy language and Virginia's coordination of coverage rules. Producers with clients who frequently ride in others' vehicles should ensure UM/UIM limits are adequate for this scenario.

What is Virginia's position on stacking UM/UIM coverage across multiple vehicles on the same policy?

Virginia's § 38.2-2206 stacking change applies to the relationship between the at-fault driver's liability coverage and the victim's UIM — this is sometimes called "inter-policy" or "external" stacking. Virginia has separate rules on "intra-policy stacking" — stacking UIM coverage for multiple vehicles listed on the same policy. Insurers in Virginia typically include anti-stacking provisions in their policies for multiple covered vehicles. Whether a policyholder can stack UIM limits across vehicles on the same policy depends on the specific policy language and has been the subject of litigation in Virginia. Producers should not advise clients that their UIM limits multiply by vehicle count without reviewing the specific policy anti-stacking language.

Virginia's UM/UIM framework — mandatory coverage, the 2023 stacking change, and the 2025 new minimums — provides Virginia drivers with meaningfully stronger protection than the prior system. Producers who understand every layer of these rules advise clients with the accuracy and confidence that builds lasting professional relationships.

Visit JustInsurance to enroll today and master Virginia's UM/UIM rules with a state-approved course covering the complete auto insurance law section.

Title: Virginia Insurance Fraud Law: The Bureau of Insurance Enforcement Framework

Meta Title: Virginia Insurance Fraud Law: Bureau of Insurance Enforcement Guide

Primary Keyword: Virginia insurance fraud law enforcement

Insurance fraud costs Virginia policyholders real money — fraudulent claims drive up premiums, misrepresentation undermines the integrity of the risk pool, and agent misconduct erodes client trust. Virginia's legal framework for addressing insurance fraud operates across multiple statutory chapters in Title 38.2, with the SCC Bureau of Insurance serving as the primary enforcement authority for market conduct and producer misconduct, and the Commonwealth's attorney system addressing criminal fraud. For producers, understanding the fraud framework is partly about knowing what the rules prohibit — and partly about understanding the reporting obligations that arise when fraud is suspected.

Virginia's Insurance Fraud Statute

Virginia's primary insurance fraud statute is found in Title 18.2 of the Code of Virginia (the criminal code), not in Title 38.2. Va. Code § 18.2-178 (insurance fraud) prohibits:

Making any false statement or representation in any application for insurance

Making any false statement or representation in any claim for insurance benefits or payment

Assisting another in making such false representations

Insurance fraud under § 18.2-178 is a felony (Class 5, punishable by up to 10 years in prison) when the value involved exceeds $1,000, and a Class 1 misdemeanor for smaller amounts. Federal insurance fraud statutes (18 U.S.C. §§ 1033-1034) additionally apply to persons engaged in the business of insurance, imposing federal criminal liability for willfully embezzling, stealing, or misappropriating insurance funds.

Title 38.2 Fraud-Related Provisions

Within Title 38.2, fraud-related obligations for producers and insurers appear across several chapters:

Chapter 5, § 38.2-510 — Unfair Claim Settlement Practices: It is an unfair practice to misrepresent pertinent facts or policy provisions relating to claims. This provision creates regulatory liability (civil penalties, license action) for adjusters and producers who misrepresent claims information, even if the conduct does not rise to criminal fraud.

Chapter 2 — General Enforcement: The SCC has authority to investigate any person engaging in insurance business and to examine records, issue cease and desist orders, impose civil penalties, and refer matters for criminal prosecution. The Bureau's market conduct examination authority extends to reviewing claim files, policy records, and agent transaction records.

Chapter 18, § 38.2-1826 — Producer Reporting Obligations: Virginia producers are required to report to the Bureau within 30 calendar days:

Any administrative action (license suspension, revocation, or discipline) taken against them in another jurisdiction

Any felony conviction

Any charge of a felony involving misappropriation, conversion, or theft of funds

Any civil judicial action involving fraud, misrepresentation, or dishonest dealing

The Bureau's Enforcement Authority Against Agents

The Bureau of Insurance enforces compliance through:

Market conduct examinations: The SCC has authority to examine the books, records, and accounts of any insurer or producer licensed in Virginia. Examinations can be triggered by consumer complaints, statistical anomalies, or as part of routine compliance review.

License suspension and revocation (§ 38.2-1831): The Bureau can suspend, revoke, or refuse to renew a producer license for fraud, misrepresentation, misappropriation of premiums, twisting, rebating, and other violations of Title 38.2 or the criminal code. License action is separate from and in addition to any criminal prosecution.

Civil penalties: The SCC can assess civil money penalties for violations of Title 38.2, including fraud-related conduct.

Restitution: Under § 38.2-218, the Commission may order restitution for policyholders who have been harmed by a producer's illegal conduct, including misappropriation of premiums.

The $25 Referral Fee Rule and Related Prohibitions

The Bureau's enforcement guidance highlights a common area of producer confusion around the line between permissible business development and prohibited rebating or fraud:

Referral fees to unlicensed persons: A licensed producer may pay a one-time nominal fee to an unlicensed person for referrals. The Bureau's position is that a "nominal fee" cannot exceed $25 per referral. The referral payment cannot be contingent on whether the referred person actually purchases insurance — contingent fees are rebating.

Gifts and inducements: Offering any valuable consideration as an inducement to purchase insurance is prohibited rebating under § 38.2-509. Gifts, gift cards, or other items provided to clients who purchase a policy constitute rebating. The Bureau advises that if promotional items are given, they must be available to anyone who enters the agency regardless of whether they buy a policy.

Producer Record Retention as a Fraud Prevention Tool

Virginia's 3-year record retention requirement (§ 38.2-1809) serves a dual fraud-prevention purpose: it allows producers to document their own compliance with applicable rules, and it allows the Bureau to verify that documented transactions reflect what actually occurred. Adequate records are a producer's primary protection against disputed claims of misrepresentation or misconduct.

Frequently Asked Questions

What is the producer's obligation when they suspect a client or claimant is committing insurance fraud?

Virginia does not impose a mandatory reporting requirement on producers for suspected consumer fraud in the same way some states do. However, producers who knowingly assist a client in filing a fraudulent claim may themselves be liable under Va. Code § 18.2-178 for aiding and abetting insurance fraud. The practical obligation is to refuse to participate in any transaction the producer believes is fraudulent and to consider whether a report to the insurer's SIU (Special Investigations Unit) or the Bureau of Insurance is appropriate under the circumstances. Producers who have reasonable suspicion of systematic fraud affecting their book of business should consult with legal counsel about reporting obligations and protections.

What happens to a producer's license if they are convicted of insurance fraud?

A felony conviction — including insurance fraud under § 18.2-178 or federal insurance fraud under 18 U.S.C. § 1033 — is grounds for mandatory license revocation under § 38.2-1831. The producer must report the conviction to the Bureau within 30 calendar days of the conviction (not just after appeals are exhausted). The Bureau will initiate license revocation proceedings. Federal 18 U.S.C. § 1033 additionally imposes a lifetime bar on engaging in the business of insurance for anyone convicted under that statute, unless written consent is obtained from the applicable state insurance authority.

Can a Virginia producer be held liable for misrepresentation that does not rise to the level of criminal fraud?

Yes. Virginia's unfair trade practices statute (Title 38.2, Chapter 5) prohibits misrepresentation of policy terms, benefits, and financial condition of insurers as a matter of civil regulatory law — entirely separate from criminal fraud. A producer who misrepresents coverage terms to a client to secure a sale may not meet the criminal standard for fraud but can face: license suspension or revocation under § 38.2-1831, civil penalties under § 38.2-218, restitution orders, and potential civil liability to the client for damages. The civil regulatory standard is lower than the criminal standard — the Bureau does not need to prove criminal intent, only that the misrepresentation occurred and violated Title 38.2.

What is the Bureau's process for investigating a producer accused of misconduct?

When the Bureau receives a complaint or identifies potential misconduct through a market conduct examination, it can open an investigation. The process typically involves: (1) a request for the producer to provide records and a written response to the allegations; (2) review of policy files, transaction records, and correspondence; (3) if violations are identified, a notice of opportunity to cure or a formal hearing; (4) issuance of a consent order, cease and desist, or license action; and (5) if the conduct is criminal, referral to the appropriate Commonwealth's attorney or federal authorities. Producers who receive a Bureau inquiry should respond completely and promptly — failure to respond is itself a ground for license action — and should consider consulting with a licensed Virginia insurance attorney.

Does Virginia have a separate dedicated insurance fraud bureau like some other states?

Virginia does not have a separate standalone insurance fraud bureau equivalent to NJ's OIFP. Insurance fraud investigation in Virginia is handled through a combination of the SCC Bureau of Insurance (market conduct and producer misconduct), the Virginia State Police (criminal investigation), and the Commonwealth's attorneys (prosecution of criminal insurance fraud). The Bureau of Insurance does have an enforcement/compliance unit focused on market conduct and producer discipline. Federal insurance fraud falls under FBI jurisdiction and is prosecuted by U.S. Attorneys in Virginia's four federal judicial districts.

Virginia's insurance fraud framework is distributed across criminal statutes, the Title 38.2 regulatory system, and the Bureau's enforcement authority — producers who understand all three layers understand both what is prohibited and what the consequences of violations are.

Visit JustInsurance to enroll today and study Virginia's insurance law enforcement framework with a state-approved course built to the current Prometric content outline.