Big Change Coming to Virginia UM/UIM: The 2022 Law That Ends the Offset in July 2023
Here is a scenario we have had to explain to seriously injured Virginians for our entire careers, and it never gets easier. You were responsible: you bought $100,000 in underinsured motorist coverage to protect your family. The driver who hit you carried $100,000 in liability coverage. Your medical bills alone exceed $200,000. How much does your own UIM coverage — the coverage you paid premiums for — add to your recovery?
Zero.
That result comes from Virginia's underinsured motorist offset: under the law that still governs today, your UIM coverage is reduced dollar-for-dollar by the at-fault driver's liability limits. UIM pays only the difference between your UIM limit and the tortfeasor's coverage. Equal limits means no difference — and no recovery from the coverage you bought. Virginians have been discovering this at the worst possible moment for decades.
Earlier this year, the General Assembly finally fixed it. Senate Bill 754, enacted in the 2022 session, amends Virginia Code §§ 38.2-2202 and 38.2-2206 so that, for policies issued or renewed on or after July 1, 2023, underinsured motorist coverage pays in addition to the at-fault driver's liability coverage — no credit, no offset — unless the policyholder affirmatively elects to keep offset-style coverage.
Before and after, in numbers
Take a crash with $200,000 in proven damages, a defendant carrying $100,000 in liability limits, and your own $100,000 in UIM coverage:
| Current law (offset) | SB 754 (policies issued/renewed on or after 7/1/2023) | |
|---|---|---|
| At-fault driver's liability insurer pays | $100,000 | $100,000 |
| Your UIM coverage pays | $0 ($100k UIM minus $100k liability) | $100,000 (stacks on top) |
| Total insurance recovery | $100,000 | $200,000 |
The same UIM premium that buys nothing in that scenario today will buy real protection next year. It is difficult to overstate what this means for catastrophically injured people: Virginia's minimum-limits drivers far outnumber its umbrella-policy drivers, and the offset has quietly capped recoveries at the tortfeasor's (often minimal) coverage no matter how careful the victim was in buying insurance.
The perversity of the old rule is easiest to see from the consumer's chair. Two Virginians each pay for $100,000 in UM/UIM protection. One is hit by a completely uninsured driver and collects the full $100,000 from her own policy. The other is hit by a driver carrying the same $100,000 the victim bought — and collects nothing from the coverage she paid the same premium for. The severity of the injury is identical; the difference is an accident of the wrongdoer's paperwork. Legislators heard versions of that story for years before this session finally produced the fix.
The details that will matter
- The trigger is your policy's date, not the crash date. The new rule applies to policies issued or renewed on or after July 1, 2023. Because auto policies typically renew every six or twelve months, most Virginians will roll onto the new regime during the following year — but a crash shortly after July 1 may still be governed by an old policy that has not yet renewed.
- Watch the election forms. The statute permits a named insured to elect the old offset-style coverage. Expect insurers to present that election in renewal paperwork, possibly framed around a modest premium difference. Read before you sign; the offset election gives back the very protection this law was passed to provide.
- Nothing changes yet. For crashes today and policies now in force, the offset still applies. Case evaluation and settlement strategy in pending UIM matters must run on current law.
What this means for injured people in Virginia
For now: if you are hurt by an underinsured driver, the offset still controls your claim, and structuring settlements with the liability insurer and your UIM carrier remains a technical exercise where mistakes forfeit coverage — get counsel involved before signing anything. For the future: when your renewal arrives next summer, confirm you are getting the new additive UIM coverage, and treat your UM/UIM limits as what they are about to become — the single most important line on your policy.
We will return to this change as the effective date approaches, including a practical guide to renewals and election forms once insurers' paperwork starts arriving. It is the biggest pro-consumer reform of Virginia auto insurance in a generation, and it happened with far less public attention than it deserves. If you do one thing after reading this post, let it be this: pull out your declarations page, find your UM/UIM limits, and ask whether those numbers would actually protect your family — because starting next July, for the first time, they fully can.
If you or a loved one has been hurt, call Posey Lebowitz at (202) 524-0123 or send us a message for a free consultation.
Part of our DMV case law archive, compiled in 2026 to reflect the archive of some of the most important decisions in injury law.
Update: Nine days after this post, GEICO Advantage Insurance Co. v. Miles (Va. Dec. 1, 2022) confirmed the offset-era reading of the old law — a final snapshot of the “before” picture. The new regime took effect as scheduled: see July 1, 2023: Virginia's UM/UIM Offset Is Dead — Stacking Arrives and our FAQ on policies, renewals, and elections.