CHAPTER 462

An Act to amend and reenact § 38.1-881, as amended, of the Code of Vir-
ginia, relating to policies or contracts of bodily injury liability insur-
ance or of property damage liability insurance. g 98

{S 285]

Approved March 31, 1960

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, shall be
issued or delivered in this State to the owner of such vehicle, or shall be
issued or delivered by any insurer licensed in this State upon any motor
vehicle then principally garaged 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 with the consent,
expressed or implied, of the named insured, against liability for death or
injury sustained, 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 by the named insured or by any such person.

(b) Nor shall any such policy or contract 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 exclusion of the first two hundred dollars of such loss or

amage.

(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 liability 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 insur-
ance company 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 en-
dorsement or provisions shall be subject to the conditions hereinafter set

orth.

(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 right to file pleadings and take other action allowable by
law in the name of John 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
process upon the insurance company issuing the policy in the manner
prescribed by law, as though such insurance company were a party de-
fendant; such company shall thereafter have the right to file pleadings
and take other action allowable by law in the name of the owner or opera-
tor of the uninsured motor vehicle or in its own name; provided, however,
that nothing in this paragraph shall prevent such owner or operator
from employing 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;
provided that the bringing of an action against the unknown owner or
operator as John Doe or the conclusion of such an action shall not con-
stitute 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 pro-
vision 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.

(g) No such endorsement or provisions shall contain any provision
requiring arbitration of any claim arising under such endorsement or
provisions, nor may anything be required of the insured except the estab-
lishment of legal liability, nor shall the insurer be restricted or prevented
in any manner from employing legal counsel or instituting legal pro-
ceedings.

(h) The provisions of paragraph (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.
2. An emergency exists and this act is in force from its passage.