Llewellyn v. White: Your UIM Settlement Is None of the Defendant's Business
You pay your auto insurance premiums for years — including for underinsured motorist (UIM) coverage, the protection you buy for the day a driver with too little insurance wrecks your life. Now imagine you are badly hurt, your UIM carrier pays you a settlement under the coverage you bought, and the at-fault driver then demands that his responsibility be reduced dollar-for-dollar by your own insurance money.
Late last month, the Supreme Court of Virginia said no. In Llewellyn v. White, decided August 15, 2019, the Court held that a plaintiff's pre-trial settlement with her own UIM carrier does not entitle the underinsured at-fault driver to a reduction of the jury's verdict. 297 Va. 588, 831 S.E.2d 494 (2019).
First, a refresher on UIM
Underinsured motorist coverage is part of the standard Virginia auto policy. When an at-fault driver's liability limits are too small to cover your losses, your own UIM coverage steps in — though under Virginia law as it stands in 2019, the UIM benefit is measured by your limits minus the at-fault driver's liability limits (the "offset" rule we covered in February 2015). Seriously injured people therefore often have two insurance negotiations running at once: one with the wrongdoer's liability carrier, and one with their own UIM carrier. What happens when the UIM piece settles first was the question in this case.
The legal fight
The defendant invoked Virginia Code § 8.01-35.1, the statute that reduces a verdict by amounts paid by a joint tortfeasor — a co-wrongdoer — who settles before trial. The logic of that statute is fair enough: an injured person should not collect the same dollar of damages twice from two people who caused the harm.
But the plaintiff's UIM carrier is not a wrongdoer. It caused nothing. It paid because the plaintiff had a contract — one she purchased with her own premiums, precisely for this situation. The Supreme Court treated the UIM payment as what it is: a benefit of the plaintiff's own bargain, and therefore a collateral source the defendant has no claim to.
Virginia's collateral source rule embodies a simple piece of justice: if someone must benefit from the plaintiff's foresight in buying insurance, it should be the plaintiff who paid for it — not the wrongdoer. A defendant's responsibility is measured by the harm he caused, not by how prudent his victim was.
What it means in practice
Consider a purely illustrative example:
| Without Llewellyn's rule | With Llewellyn's rule | |
|---|---|---|
| Jury verdict against at-fault driver | $1,000,000 | $1,000,000 |
| Plaintiff's pre-trial UIM settlement (own carrier) | $300,000 | $300,000 |
| Credit to the defendant | −$300,000 | $0 |
| Defendant's judgment liability | $700,000 | $1,000,000 |
Under the defendant's theory, the wrongdoer would pocket the value of coverage the victim spent years paying for. Under the Supreme Court's holding, the victim keeps the benefit of her own contract, and the defendant answers for the full verdict.
Why this matters for settlement strategy
Llewellyn is more than an accounting rule — it is foundational for how serious Virginia injury cases get resolved:
- UIM settlements are now safer to make. Before this decision, settling early with your own UIM carrier carried a risk: the at-fault driver might claim a credit and shrink his own exposure. That risk is gone. An injured person can take certain money from her own carrier without discounting the case against the wrongdoer.
- It preserves leverage against the liability insurer. The at-fault driver's insurer can no longer wait out the UIM negotiation hoping to free-ride on it.
- It rewards buying UIM coverage. Remember that under Virginia law in 2019, your UIM coverage is reduced by the at-fault driver's liability limits (the "offset" we explained in our February 2015 post) — so the coverage often pays less than its face amount. The one consolation is that what it does pay is yours, and Llewellyn keeps it that way.
The decision also aligns Virginia's treatment of UIM benefits with the deeper logic of its collateral source tradition: payments from sources independent of the wrongdoer — health insurance, disability benefits, and now the injured person's own UIM contract — belong to the person who secured them. The wrongdoer takes the plaintiff as he finds her, prudence and premiums included.
What this means for injured people in Virginia
If you were seriously hurt by a driver whose insurance cannot cover your losses, your own policy may be a critical part of the recovery — and the sequencing of settlements (liability limits, UIM claim, trial) is now a genuine strategy question with real money attached. Handled well, each source pays what it owes, and none of it inures to the person who caused the harm.
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: The UIM offset described here was abolished for policies issued or renewed on or after July 1, 2023 — see our posts on the 2022 law ending the offset and the arrival of stacking in July 2023. Llewellyn's collateral-source holding remains good law.