Va. Code » Title 38.2. Insurance » Chapter 5. Unfair Trade Practices

Va. Code Ann. § 38.2-510

Unfair claim settlement practices

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A. No person shall commit or perform with such frequency as to indicate a general business practice any of the following:

1. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;

2. Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;

3. Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;

4. Refusing arbitrarily and unreasonably to pay claims;

5. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;

6. Not attempting in good faith to make prompt, fair and equitable settlements of claims in which liability has become reasonably clear;

7. Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds;

8. Attempting to settle claims for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application;

9. Attempting to settle claims on the basis of an application that was altered without notice to, or knowledge or consent of, the insured;

10. Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made;

11. Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;

12. Delaying the investigation or payment of claims by requiring an insured, a claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, when both contain substantially the same information;

13. Failing to promptly settle claims where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage;

14. Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement;

15. Failing to comply with § 38.2-3407.15, or to perform any provider contract provision required by that section;

16. Payment to an insurer or its representative by a repair facility, or acceptance by an insurer or its representative from a repair facility, directly or indirectly, of any kickback, rebate, commission, thing of value, or other consideration in connection with such person's appraisal service; or

17. Making appraisals of the cost of repairing a motor vehicle that has been damaged as a result of a covered loss unless such appraisal is based upon a personal inspection by a representative of the repair facility or a representative of the insurer who is making the appraisal. Notwithstanding the requirement that an appraisal be based upon a personal inspection, the repair facility or the insurer making the appraisal may prepare an initial, which may be the final, repair appraisal on a motor vehicle that has been damaged as a result of a covered loss either from the representative's personal inspection of the motor vehicle or from photographs, videos, or electronically transmitted digital imagery of the motor vehicle; however, no insurer may require an owner of a motor vehicle to submit photographs, videos, or electronically transmitted digital imagery as a condition of an appraisal. Supplemental repair estimates that become necessary after the repair work has been initiated due to discovery of additional damage to the motor vehicle may also be made from photographs, videos, or electronically transmitted digital imagery of the motor vehicle, provided that in the case of disputed repairs a personal inspection is required.

B. No violation of this section shall of itself be deemed to create any cause of action in favor of any person other than the Commission; but nothing in this subsection shall impair the right of any person to seek redress at law or equity for any conduct for which action may be brought.

C. 1. No insurer shall prepare or use an estimate of the cost of automobile repairs based on the use of an after market part, as defined herein, unless:

The insurer discloses to the claimant in writing either on the estimate or in a separate document attached to the estimate the following information:

"THIS ESTIMATE HAS BEEN PREPARED BASED ON THE USE OF AUTOMOBILE PARTS NOT MADE BY THE ORIGINAL MANUFACTURER. PARTS USED IN THE REPAIR OF YOUR VEHICLE BY OTHER THAN THE ORIGINAL MANUFACTURER ARE REQUIRED TO BE AT LEAST EQUAL IN LIKE KIND AND QUALITY IN TERMS OF FIT, QUALITY AND PERFORMANCE TO THE ORIGINAL MANUFACTURER PARTS THEY ARE REPLACING."

2. "After market part" as used in this section shall mean an automobile part which is not made by the original equipment manufacturer and which is a sheet metal or plastic part generally constituting the exterior of a motor vehicle, including inner and outer panels.

Code 1950, § 38.1-52; 1952, c. 317, § 38.1-52.9; 1977, c. 529; 1978, c. 441; 1979, c. 324; 1980, c. 404; 1986, c. 562; 1988, c. 29; 1999, cc. 709, 739; 2000, c. 187; 2001, c. 335; 2016, cc. 183, 286.

Notes of Decisions
Cited in 23 cases (7 in the last 5 years), 1986–2025 · leading case: Manu v. GEICO Casualty Co.
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Manu v. GEICO Casualty Co. (2017) va · cites it 2× “, Code §§ 38.2-510(A) (6), (7), (14) ; Final Report of the Joint Subcommittee Studying Motor Vehicle Insurance and Unisex Ratings, S.”
Capitol Environmental Services, Inc. v. North River Insurance (2008) vaed · cites it 3× “By January 4, 2007, Capitol had not yet received a response to its December 8 letter, and once again Capitol wrote to North River, suggesting that North River’s delay could subject it to liability for unfair claims settlement practices under Va.Code § 38.2-510. 10 North River…”
Allstate Insurance v. United Services Automobile Ass'n (1995) va · cites it 5× “USAA cites Code § 38.2-510, which, USAA maintains, is declarative of this Commonwealth’s public policy on the subject of unfair insurance practices.”
Harris v. USSA Casualty Ins. (1994) vaccnorfolk · cites it 5× “Va. Code § 38.2-510(6). Provisions of the insurance sections of the Virginia Code have often been ruled to be implied conditions of an insurance contract by the Virginia Supreme Court.”
A & E Supply Company, Inc. v. Nationwide Mutual Fire Insurance Company, a & E Supply Company, Inc. v. Nationwide Mutual (1986) ca4 “” Va. Code § 38.2-510(B). 8 . An insurer’s first-party insurance obligation is its duty to compensate the insured for direct losses within the policy coverage.”
Ambrose v. Blue Cross & Blue Shield of Virginia, Inc. (1995) vaed · cites it 2× “” Section 38.2-510 is entitled “Unfair claim settlement practices.”
GRM Management, LLC v. Cincinnati Insurance Co. (2017) vaed · cites it 3× “) While § 5-400-60 appears to establish such a requirement, Va. Code § 38.2-510(B), the statutory authority for § 5-400-60, does not give rise to a private cause of action, stating that ”[n]o violation of this section shall pf itself be deemed to create any cause of action in…”
Stockton v. New York Life Insurance Company (2025) vawd · cites it 15× “Unfair Claim Settlement Practices Act NYLife objects to the R&R on the grounds that Stockton’s new claim for breach of the implied duty of good faith and fair dealing is precluded by the Unfair Claim Settlement Practices Act, Va. Code § 38.2-510. NY Life argues that Stockton’s…”
Stockton v. New York Life Insurance Company (2025) vawd · cites it 15× “Unfair Claim Settlement Practices Act NYLife objects to the R&R on the grounds that Stockton’s new claim for breach of the implied duty of good faith and fair dealing is precluded by the Unfair Claim Settlement Practices Act, Va. Code § 38.2-510. NY Life argues that Stockton’s…”
Erisman v. Axis Insurance Company (2025) vawd · cites it 10× “” Va. Code Ann. § 38.2-510 (A)(11). Axis argues that if insureds could never recover arbitration awards in the first place, then there would be no reason to specify this as an unfair claim settlement practice.”
Allstate Ins. v. UNITED SERVICES AUTO. ASS'N (1995) va · cites it 5× “USAA cites Code § 38.2-510, which, USAA maintains, is declarative of this Commonwealth's public policy on the subject of unfair insurance practices.”
Manu v. GEICO Casualty Co. (2016) vaccfairfax · cites it 5× “” The Court is not persuaded that the quoted statutory provisions are of consequence to the motions before the Court, as the Complaint does not allege GEICO’s conduct was indicative of “a general business practice” and Virginia Code § 38.2-510(B) provides, “No violation of this…”
Show all 23 citing cases →
— Va. Code Ann. § 38.2-510(4) — 1 case
Earley v. U.S. Department of Housing and Urban Development (2022) vaed
— Va. Code Ann. § 38.2-510(6) — 1 case
Harris v. USSA Casualty Ins. (1994) vaccnorfolk “Va. Code § 38.2-510(6). Provisions of the insurance sections of the Virginia Code have often been ruled to be implied conditions of an insurance contract by the Virginia Supreme Court.”
— Va. Code Ann. § 38.2-510(A) — 2 cases
Manu v. GEICO Casualty Co. (2017) va “, Code §§ 38.2-510(A) (6), (7), (14) ; Final Report of the Joint Subcommittee Studying Motor Vehicle Insurance and Unisex Ratings, S.”
Manu v. GEICO Casualty Co. (2016) vaccfairfax “” The Court is not persuaded that the quoted statutory provisions are of consequence to the motions before the Court, as the Complaint does not allege GEICO’s conduct was indicative of “a general business practice” and Virginia Code § 38.2-510(B) provides, “No violation of this…”
— Va. Code Ann. § 38.2-510(A)(11) — 1 case
Erisman v. Axis Insurance Company (2025) vawd “” Va. Code Ann. § 38.2-510 (A)(11). Axis argues that if insureds could never recover arbitration awards in the first place, then there would be no reason to specify this as an unfair claim settlement practice.”
— Va. Code Ann. § 38.2-510(A)(14) — 1 case
Sedaghatpour v. Lemonade Insurance Company (2023) vaed
— Va. Code Ann. § 38.2-510(A)(6) — 3 cases
Allstate Insurance v. United Services Automobile Ass'n (1995) va “USAA cites Code § 38.2-510, which, USAA maintains, is declarative of this Commonwealth’s public policy on the subject of unfair insurance practices.”
Allstate Ins. v. UNITED SERVICES AUTO. ASS'N (1995) va “USAA cites Code § 38.2-510, which, USAA maintains, is declarative of this Commonwealth's public policy on the subject of unfair insurance practices.”
Manu v. GEICO Casualty Co. (2016) vaccfairfax “” The Court is not persuaded that the quoted statutory provisions are of consequence to the motions before the Court, as the Complaint does not allege GEICO’s conduct was indicative of “a general business practice” and Virginia Code § 38.2-510(B) provides, “No violation of this…”
— Va. Code Ann. § 38.2-510(B) — 7 cases
A & E Supply Company, Inc. v. Nationwide Mutual Fire Insurance Company, a & E Supply Company, Inc. v. Nationwide Mutual (1986) ca4 “” Va. Code § 38.2-510(B). 8 . An insurer’s first-party insurance obligation is its duty to compensate the insured for direct losses within the policy coverage.”
GRM Management, LLC v. Cincinnati Insurance Co. (2017) vaed “) While § 5-400-60 appears to establish such a requirement, Va. Code § 38.2-510(B), the statutory authority for § 5-400-60, does not give rise to a private cause of action, stating that ”[n]o violation of this section shall pf itself be deemed to create any cause of action in…”
Harris v. USSA Casualty Ins. (1994) vaccnorfolk “Va. Code § 38.2-510(6). Provisions of the insurance sections of the Virginia Code have often been ruled to be implied conditions of an insurance contract by the Virginia Supreme Court.”
Meccia v. Pioneer Life Ins. (1987) vacc
Sedaghatpour v. Lemonade Insurance Company (2023) vaed
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