CODE OF VIRGINIA

INSURER TO GIVE NOTICE TO CLAIMANT OF INTENTION TO RELY ON CERTAIN DEFENSES AND
OF EXECUTION OF NONWAIVER OF RIGHTS AGREEMENT (§ 38.2-2226)

Whenever any insurer on a policy of liability insurance discovers a breach of
the terms or conditions of the insurance contract by the insured, the insurer
shall notify the claimant or the claimant’s counsel of the breach.
Notification shall be given within forty-five days after discovery by the
insurer of the breach or of the claim, whichever is later. Whenever, on account
of such breach, a nonwaiver of rights agreement is executed by the insurer and
the insured, or a reservation of rights letter is sent by the insurer to the
insured, notice of such action shall be given to the claimant or the
claimant’s counsel within forty-five days after that agreement is executed
or the letter is sent, or after notice of the claim is received, whichever is
later. Failure to give the notice within forty-five days will result in a waiver
of the defense based on such breach to the extent of the claim by operation of
law.Notwithstanding the provisions of this section, in any claim in which a
civil action has been filed by the claimant, the insurer shall give notice of
reservation of rights in writing to the claimant, or if the claimant is
represented by counsel, to claimant’s counsel not less than thirty days
prior to the date set for trial of the matter. The court, upon motion of the
insurer and for good cause shown, may allow such notice to be given fewer than
thirty days prior to the trial date. Failure to give the notice within thirty
days of the trial date, or such shorter period as the court may have allowed,
shall result in a waiver of the defense based on such breach to the extent of
the claim by operation of law.

HISTORY: 1968, c. 410, § 38.1-389.1; 1986, c. 562; 1997, c. 377; 2001, c. 728.