CHAPTER 477

An Act to amend and reenact § 38.1-381, as amended, of the Code of
Virginia, relating to policies or contracts of bodily injury labiity in-
surance or of property damage liability insurance. rH 461)

Approved March 31, 1964

Be it enacted by the General Assembly of Virginia:

1. That § 38.1-381, as amended, of the Code of Virginia be amended and
reenacted as follows:

§ 38.1-381. (a) No policy or contract of bodily injury liability insur-
ance, or of property damage liability insurance, covering liability arising
from the ownership, maintenance or use of any motor vehicle or any
private pleasure vessel, ship, boat or other watercraft, shall be issued or
delivered in this State to the owner of such vehicle or such watercraft, or
shall be issued or delivered by any insurer licensed in this State upon any
motor vehicle or any private pleasure vessel, ship, boat or other watercraft
then principally garaged or docked or principally used in this State, unless
it contains a provision insuring the named insured and any other person
responsible for the use of or using the motor vehicle or private pleasure
vessel, ship, boat or other watercraft with the consent, expressed or
implied, of the named insured, against liability for death or injury sus-
tained, or loss or damage occasioned within the coverage of the policy or
contract as a result of negligence in the operation or use of such vehicle
or such watercraft by the named insured or by any such person; provided,
that every automobile liability insurance policy or contract, or endorse-
ment thereto, insuring private passenger automobiles principally garaged
and/or used in Virginia, and every policy of liability insurance, contract
or endorsement thereto insuring private pleasure vessels, ships, boats or
other watercraft principally docked or used in Virginia, when the named
insured is an individual or husband and wife, which includes, with respect
to any liability insurance provided by the policy, contract or endorsement
for use of a nonowned automobile or private pleasure watercraft, any pro-
vision requiring permission or consent of the owner of such automobile
or such watercraft in order that such insurance apply shall be construed
to include permission or consent of the custodian in such provision requir-
ing permission or consent of the owner.

(b) Nor shall any such policy or contract relating to ownership,
maintenance or use of a motor vehicle be so issued or delivered unless it
contains an endorsement or provisions undertaking to pay the insured all
sums which he shall be legally entitled to recover as damages from the
owner or operator of an uninsured motor vehicle, within limits which shall
be no less than the requirements of § 46.1-1 (8), as amended from time to
time, of the Code herein. Such endorsement or provisions shall also provide
for no less than five thousand dollars coverage for injury to or destruction
of the property of the insured in any one accident but may provide an ex-
clusion of the first two hundred dollars of such loss or damage.

(c) As used in this section, the term “bodily injury” shall include

death resulting therefrom; the term “insured” as used in subsections (b),
(d), (f), and (g) hereof, means the named insured and, while resident of
the same household, the spouse of any such named insured, and relatives
of either, while in a motor vehicle or otherwise, and any person who uses,
with the consent, expressed or implied, of the named insured, the motor
vehicle to which the policy applies and a guest in such motor vehicle to
which the policy applies or the personal representative of any of the above;
and the term “uninsured motor vehicle’ means a motor vehicle as to which
there is no (i) bodily injury liability insurance and property damage liabil-
ity insurance both in the amounts specified by § 46.1-1 (8), as amended
from time to time, or (ii) there is such insurance but the insurance com-
pany writing the same denies coverage thereunder, (iii) there is no bond
or deposit of money or securities in lieu of such bodily injury and property
damage liability insurance and (iv) the owner of such motor vehicle has not
qualified as a self-insurer under the provisions of § 46.1-395. A motor
vehicle shall be deemed to be uninsured if the owner or operator thereof
be unknown; provided that recovery under the endorsement or provisions
shall be subject to the conditions hereinafter set forth.
_ _ (d) If the owner or operator of any motor vehicle which causes bodily
injury or property damage to the insured be unknown, the insured or
someone on his behalf, in order for the insured to recover under the en-
dorsement, shall report the accident as required by § 46.1-400, unless such
insured is reasonably unable to do so, in which event the insured shall
make such report as soon as reasonably practicable under the circum-
stances.

(e) If the owner or operator of any vehicle causing injury or damages
be unknown, an action may be instituted against the unknown defendant as
“John Doe” and service of process may be made by delivery of a copy of
the motion for judgment or other pleadings to the clerk of the court in
which the action is brought and service upon the insurance company issuing
the policy shall be made as prescribed by law as though such insurance
company were a party defendant. The insurance company shall have the
peat _ file pleadings and take other action allowable by law in the name of

ohn Doe.

(e) (1) Any insured intending to rely on the coverage required by
paragraph (b) of this section shall, if any action is instituted against the
owner or operator of an uninsured motor vehicle, serve a copy of the pro-
cess upon the insurance company issuing the policy in the manner pre-
scribed by law, as though such insurance company were a party defendant;
such company shall thereafter have the right to file pleadings and take
other action allowable by law in the name of the owner or operator of the
uninsured motor vehicle or in its own name; provided, however, that
nothing in this paragraph shall prevent such owner or operator from em-
ploying counsel of his own choice and taking any action in his own interest
in connection with such proceeding. .

This subsection shall not apply to any cause of action arising prior
to the effective date of this amendment. .

(f) Any insurer paying a claim under the endorsement or provisions
required by paragraph (b) of this section shall be subrogated to the rights
of the insured to whom such claim was paid against the person causing
such injury, death or damage to the extent that payment was made; pro-
vided that the bringing of an action against the unknown owner or oper-
ator as John Doe or the conclusion of such an action shall not constitute
a bar to the insured, if the identity of the owner or operator who caused
the injury or damages complained of becomes known, from bringing an
action against the owner or operator theretofore proceeded against as
John Doe, provided that any recovery against such owner or operator shall
be paid to the insurance company to the extent that such insurance com-
pany paid the named insured in the action brought against such owner
or operator as John Doe, except that such insurance company shall pay its
proportionate part of any reasonable costs and expense incurred in con-
nection therewith including reasonable attorney’s fees. Nothing in an en-
dorsement or provisions made under this paragraph nor any other provi-
sion of law shall operate to prevent the joining in an action against John
Doe of the owner or operator of the motor vehicle causing such injury as a
party defendant and such joinder is hereby specifically authorized.

(zg) No such endorsement or provisions shall contain any provision
requiring arbitration of any claim arising under such endorsement or pro-
visions, nor may anything be required of the insured except the establish-
ment of legal liability, nor shall the insured be restricted or prevented in
any manner from employing legal counsel or instituting legal proceedings.

(h) The provisions of paragraphs (a) and (b) of this section shall not
apply to any policy of insurance to the extent that it covers the liability of
an employer under any workmen’s compensation law, but no provision or
application of this section shall be construed to limit the liability of the
Insurance company, insuring motor vehicles, to an employee or other
insured under this section who is injured by an uninsured motor vehicle.