July 1, 2023: Virginia's UM/UIM Offset Is Dead — Stacking Arrives
For decades, seriously injured Virginians have learned an infuriating lesson at the worst possible moment: the underinsured motorist coverage they faithfully paid for often paid them nothing. That era is ending. For auto policies issued or renewed on or after July 1, 2023, Virginia's underinsured motorist "offset" is abolished — your UIM coverage now pays in addition to the at-fault driver's liability insurance. It is one of the biggest pro-consumer insurance reforms in the Commonwealth in a generation, and this month it finally took effect.
The old rule: coverage that vanished when you needed it
Under the prior versions of Virginia Code §§ 38.2-2202 and 38.2-2206, your UIM limits were reduced — offset — dollar for dollar by whatever the at-fault driver's liability insurer paid. The math regularly zeroed out the coverage entirely. The Supreme Court of Virginia confirmed that reading of the old statute as recently as last December in GEICO Advantage Insurance Co. v. Miles (Record No. 220004, decided December 1, 2022): under the offset regime, a driver who bought $100,000 in UIM protection and was hit by a driver carrying $100,000 in liability coverage collected nothing at all from her own UIM coverage — the tortfeasor's limits consumed it completely.
In other words: the drivers most responsible — those who bought meaningful liability limits — effectively canceled out the victim's own coverage, and the premium the victim paid for UIM bought protection only to the extent the at-fault driver was badly insured.
The new rule: your coverage stacks on top
Senate Bill 754, enacted in 2022 with a delayed effective date, rewrote §§ 38.2-2202 and 38.2-2206. For policies issued or renewed on or after July 1, 2023, UIM coverage pays without any credit or offset for the liability recovery — unless the named insured affirmatively elects, in writing, to keep old-style offset coverage.
Here is what that means in dollars, for a badly injured person with $300,000 in damages and $100,000 in UIM coverage:
| Scenario | Old law (offset) | New law (stacking) |
|---|---|---|
| At-fault driver carries $30,000 (state minimum era) | Liability pays $30,000; UIM pays $70,000 — total $100,000 | Liability pays $30,000; UIM pays $100,000 — total $130,000 |
| At-fault driver carries $50,000 | Liability pays $50,000; UIM pays $50,000 — total $100,000 | Liability pays $50,000; UIM pays $100,000 — total $150,000 |
| At-fault driver carries $100,000 | Liability pays $100,000; UIM pays $0 — total $100,000 | Liability pays $100,000; UIM pays $100,000 — total $200,000 |
Same premium concept, radically different protection. Under the new law, the coverage you buy is coverage you actually get.
The fine print that matters
- Effective date runs policy by policy. The new rule applies to policies issued or renewed on or after July 1, 2023. A crash tomorrow under a policy last renewed in May 2023 is still governed by the old offset rule until that policy renews. For roughly the next year, Virginia is a two-regime state.
- The offset election. Insurers may offer — and the named insured may sign — an election to retain offset-style coverage, typically pitched as a premium saver. Think hard before signing away the stacking benefit the legislature just gave you.
- UM vs. UIM. Uninsured motorist coverage (for hit-and-runs and drivers with no insurance at all) continues to work alongside the reformed UIM coverage; the reform's target was the underinsured offset.
What this means for injured people in Virginia
First, if you are hurt in a crash from here forward, the date your policy was last issued or renewed is now one of the first facts your lawyer needs — it determines which regime applies and can swing the recovery by six figures. Dig out your declarations page.
Second, review your limits at your next renewal. With stacking in place, UIM coverage is finally worth what it costs: every dollar of UIM you buy is a dollar of real protection on top of whatever the at-fault driver carries. Liability limits in Virginia remain low relative to the cost of a serious injury; your own UIM election is the one part of the equation you control.
Third, if an insurer or adjuster tells you your UIM "doesn't apply" because the other driver had coverage, do not take that answer at face value. Under the new law, that is exactly backwards for post-July 2023 policies — and even under lingering old-law policies, offset math is frequently done wrong.
We flagged this change when the General Assembly passed it last year; now it is real. It will quietly change the value of nearly every serious crash case in Virginia.
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.