CHAPTER 182

An Act to amend and reenact $8.1-881, as amended, of the Code of
Virginia, relating to policies or contracts of bodily injury liability
ensurance or of property damage liability insurance. g

[S 33)

Approved March 31, 1966

Be it enacted by the General Assembly of Virginia:

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

§ 38.1-381. (a) No policy or contract of bodily injury liability in-
surance, or of property damage liability insurance, covering liability aris-
ing from the ownership, maintenance or use of any motor vehicle or any
private pleasure vessel, ship, boat or other watercraft, shall be issued o1
delivered in this State to the owner of such vehicle or such watercraft, 01
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 persor
responsible for the use of or using the motor vehicle or private pleasure
vessel, ship, boat or other watercraft with the consent, expressed or im:-
plied, 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 suct
vehicle or such watercraft by the named insured or by any such person
provided, that every automobile liability insurance policy or contract, 01
endorsement 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 o1
endorsement for use of a nonowned automobile or private pleasure water.
craft, any provision 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 pro-
vision requiring permission or consent of the owner.

(a-1) Nor shall any such policy or contract relating to ownership
maintenance or use of a motor vehicle be so issued or delivered unless ti
contains an endorsement or provision insuring the mamed insured anc
any other person responsible for the use of or using the motor vehicle
with the consent, expressed or implied, of the named insured, agains
kability 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
policy; provided, however, that if such failure or refusal prejudices the
insurer in the defense of an action for damages arising from the operation
or i of such motor vehicle, then this endorsement or provision shall be
vou.

(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 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 insurance company writing the same denies coverage, thereunder
for any reason whatsoever including failure or refusal of the insured to
cooperate with such company, (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
endorsement, 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 cir-
cumstances.

(e) If the owner or operator of any vehicle causing injury or dam-
ages be unknown, an action may be instituted against the unknown de-
fendant 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
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 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 April twenty-seventh, nineteen hundred and fifty-nine.

Any insurer paying a claim under the endorsement or provi-
sions 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
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 company 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 in-
curred in connection therewith including reasonable attorney’s fees. No-
thing in an endorsement or provisions made under this paragraph nor
any other provision 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 insured be restricted or prevented
in any manner from employing legal counsel or instituting legal proceed-

ings.

(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 em-
ployee or other insured under this section who is injured by an uninsured
motor vehicle.