38.2-2226 - Insurer to give notice to claimant of intention to rely on certain defenses and of execution of nonwaiver of rights agreement. - Virginia Statutes

§ 38.2-2226. Insurer to give notice to claimant of intention to rely oncertain defenses and of execution of nonwaiver of rights agreement.

Whenever any insurer on a policy of liability insurance discovers a breach ofthe terms or conditions of the insurance contract by the insured, the insurershall notify the claimant or the claimant's counsel of the breach.Notification shall be given within forty-five days after discovery by theinsurer of the breach or of the claim, whichever is later. Whenever, onaccount of such breach, a nonwaiver of rights agreement is executed by theinsurer and the insured, or a reservation of rights letter is sent by theinsurer to the insured, notice of such action shall be given to the claimantor the claimant's counsel within forty-five days after that agreement isexecuted or the letter is sent, or after notice of the claim is received,whichever is later. Failure to give the notice within forty-five days willresult in a waiver of the defense based on such breach to the extent of theclaim by operation of law.

Notwithstanding the provisions of this section, in any claim in which a civilaction has been filed by the claimant, the insurer shall give notice ofreservation of rights in writing to the claimant, or if the claimant isrepresented by counsel, to claimant's counsel not less than thirty days priorto the date set for trial of the matter. The court, upon motion of theinsurer and for good cause shown, may allow such notice to be given fewerthan thirty days prior to the trial date. Failure to give the notice withinthirty days of the trial date, or such shorter period as the court may haveallowed, shall result in a waiver of the defense based on such breach to theextent of the claim by operation of law.

(1968, c. 410, § 38.1-389.1; 1986, c. 562; 1997, c. 377; 2001, c. 728.)