As a law firm with offices in Virginia and North Carolina and attorneys actively litigating personal injury cases in both Virginia and North Carolina courts, we frequently encounter cases where there are drivers from multiple states involved in a crash. In these situations, there are often different state laws governing the potential recovery and the insurance coverages. The state where the underlying policies are written has different laws and rules governing these coverages and how to settle a claim without prejudicing the coverages.
For example, how does one settle an injury claim for a crash that happened in North Carolina, but has both Virginia and North Carolina liability and Underinsured Motorist (UIM) coverages?
The substantive law of the state where the crash occurred applies to the circumstances of the crash and any release of the tortfeasor (lex loci delecti). Insurance policies, however, are contracts between the insurer and the insured. As such, the policy is governed by the law of the state where the policy is written (lex loci contractus). Virginia UIM policies are governed by Code of Virginia Section 38.2-2206. This statute establishes a framework for settling with a liability carrier while preserving the UIM claim and coverage of a Virginia UIM policy.
However, North Carolina law establishes a different framework for liability settlements while preserving UIM coverage rights (NCGS 20-279.21). If an injured person settles their claim and releases the tortfeasor (driver causing the injury) the consequences could be disastrous; their UIM coverage/benefits may be extinguished.
For these reasons, it is important to hire a law firm with attorneys who know the laws of Virginia and North Carolina and has significant experience in handling personal injury cases with conflict of laws issues. Contact Slaughter & Lupton Law, PLLC today.
