In 2013 the General assembly enacted Code of Virginia section 38.2-236. This section requires an insurer to give written notice whenever it makes a payment of $5000 or more to settle an injured person’s claim. Pursuant to Virginia’s Code, this notice of payment must be made directly to the injured person within five business days from the date the payment is made or sent to the injured person’s attorney. An injured person who receives a notice of payment from an insurance company often, and quite reasonably, expects that their attorney has received the settlement check when they get the “notification of payment” in the mail. In cases that are settled without a lawsuit being filed, that assumption is often correct. Unfortunately, in cases in which suit has been filed or defense attorneys are involved, the check may be days or even weeks away from arrival.
In many cases, the insurance company sends the notification of payment to the injured person when the check is drafted. In the eyes of the insurance company this means that payment has been made, but it does not necessarily mean that the payment has been mailed to the injured person’s attorney. In fact, the settlement proceeds are often mailed to the defense attorney involved in the case. The defense attorney then has to draft a release and/or a dismissal order for the court and mail both the release and the check to the attorney for the injured person. It can take some time before this paperwork is in order.
Requiring notices of payment is designed to protect injured people as they are formally advised that their case has been settled and a check has been drafted to pay the claim. Simultaneously, however, these notices may create an expectation that the case will be closed and payment on the claim is available immediately. Injured claimants should be aware that even though they received a notice from the insurance carrier that payment has been made, their attorney may not be in possession of the money as of the date on the letter. Saying “the check is in the mail” doesn’t mean that the check is in the bank.
About the Author: Dave Douthit is a personal injury attorney at the law firm of Allen & Allen. Working out of the Richmond Office, Dave is experienced in handling cases ranging from bike accidents to car accidents to premises liability.
 Availble in full at: https://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+38.2-236 .