Virginia now requires insurers to explain and document every reduction they make to a loss estimate of $3,000 or more.
House Bill 808, signed into law by the Governor on April 13, 2026, as Chapter 672, amends Section 38.2-510 of the Code of Virginia – the state's longstanding unfair claim settlement practices statute – by adding a new subsection that targets a specific and familiar pain point in the claims process: what happens when an insurer alters an adjuster's original damage estimate downward, and why. The law takes effect on July 1, 2026.
The bill was sponsored by Delegates Dan Helmer, Nicole Cole, Mark Downey, Phil Hernandez, May Nivar, and Stacey Annie Carroll. It passed the House 97-0, cleared the Senate with a substitute 33-7, and was agreed to by the House on the Senate substitute 98-0 before enrollment and the Governor's signature.
Under the new law, insurers that reduce a loss estimate of $3,000 or more must meet three requirements. They must provide the policyholder with a detailed explanation for every change that has the effect of reducing the loss estimate. They must include in the report, or as an addendum to the report, a detailed list of all changes made along with the identity of the person who made or ordered each such change. And they must retain all versions of the report and include within each version, for each change made, the identity of the person that made or ordered such change.
That last requirement is worth pausing on. Retaining all versions of a report with individual attribution means there is now a paper trail – one that regulators can follow. For claims teams operating in Virginia, this is not just a procedural tweak. It changes how files are managed, how internal reviews are documented, and how much visibility policyholders have into the process.
The $3,000 threshold ensures the provision casts a wide net. This is not limited to catastrophic or high-value losses. A routine auto claim or a modest property loss could easily cross that line, meaning the new rules will touch everyday claims handling, not just outlier cases.
The rest of Section 38.2-510 remains unchanged and continues to set the baseline for insurer conduct in Virginia. The statute already prohibits a range of practices when carried out with such frequency as to indicate a general business practice, including misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue, failing to acknowledge and act reasonably promptly upon claims communications, refusing arbitrarily and unreasonably to pay claims, and failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed. It also prohibits insurers from 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, and from 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.
The statute's existing provisions on auto claims are also worth noting for context. Virginia already requires that motor vehicle damage appraisals be based on a personal inspection by a representative of the repair facility or a representative of the insurer making the appraisal, though insurers are permitted to prepare an initial repair appraisal from photographs, videos, or electronically transmitted digital imagery. Insurers cannot, however, require a vehicle owner to submit photographs, videos, or electronically transmitted digital imagery as a condition of an appraisal. When after market parts are used in a repair estimate, insurers must disclose that in writing and state that parts used in the repair 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. The statute defines an after market part as an automobile part not made by the original equipment manufacturer that is a sheet metal or plastic part generally constituting the exterior of a motor vehicle, including inner and outer panels. The law also prohibits payment to an insurer or its representative by a repair facility, or acceptance by an insurer or its representative from a repair facility, of any kickback, rebate, commission, thing of value, or other consideration in connection with appraisal services.
One important limitation carries over from the existing statute. A violation of Section 38.2-510 does not, on its own, create any cause of action in favor of any person other than the Commission. The provision does note, however, that nothing in the subsection shall impair the right of any person to seek redress at law or equity for any conduct for which action may be brought.
For insurers and adjusters operating in Virginia, the takeaway is straightforward. Starting July 1, 2026, reducing a loss estimate of $3,000 or more without a detailed explanation, a documented list of changes, and a retained record identifying who made or ordered each change will run afoul of the state's unfair claim settlement practices statute. Claims teams will want to make sure their workflows and file management systems are ready.
