CHAPTER 459

An Act to amend and reenact § $8.1-881, as amended, of the Code of Vir-
ginia, relating to policies of liability insurance on motor vehicles and
watercraft; and provisions and clauses thereof. CH 825]

Approved April 1, 1966

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
insurance, 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 water-
craft than 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 endorsement
thereto, insuring private passenger automobiles principally garaged and/or
used in Virginia, and every policy of liability insurance, contract or en-
dorsement 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 provision re-
quiring 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 requiring per-
mission or consent of the owner.

(a1) Any endorsement, provision or rider attached to, or included in,
any such policy of insurance which purports or seeks in any way to limit
or reduce in any respect the coverage afforded by the provisions required
therein by this section shall be wholly void.

(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; provided, however, that said insured, after
January 1, 1967, shall be offered the opportunity to contract, at an addt-
tional premium, for limits higher than those provided in § 46.1-1 (8) 80
long as such limits do not exceed the limits of the automobile liability cov-
erage provided by such policy. 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
ald 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, (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 endorse-
ment 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-

ces.

(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 compan
issuing the policy shall be made as prescribed by law as though su
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 fifty-nine.

(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
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
incurred in connection therewith including reasonable attorney’s fees.
Nothing 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 pro-
ceedings.

(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.