Legal Question in Personal Injury in Virginia

Re: Whose liability?

Under VA law, your friend could be personally liable for damages in excess of the policy limits. If there is an unsatisfied judgment for a motor vehicle accident, the VA DMV will suspend the person's license. Assets (cars, real estate, bank/investment accounts) and (at least if employed in VA) wages can be attached or garnished to satisfy the judgment, so it may mean that your friend will have to consider bankruptcy. An insurance company has a duty to its policy holders to act in good faith, including trying to settle cases within the policy limits where appropriate in order to protect their insured. A breach of that duty can subject the insurance co. to liability in excess of the policy limits. Your friend should retain a lawyer (other than the one appointed by the insurance company) to make sure that his/her rights are fully protected and that the insurance company is forced, as far as possible, to settle within the policy limits.

Re: Whose liability?

It is not clear from your question whether this is NC of VA law. Under NC law, your friend would be liable for any judgment in excess of the policy limits. I would surmise that VA law is the same, but I do not know. As for being "judgment proof," that is a matter of "collectible assets," which is typically real property and perhaps a vehicle. There is not a way to "garnish" wages for such a judgment, and collection is usually difficult against someone as you describe. The vast majority of suits are settled within the limits of insurance, and I would venture to guess that this will probably be the case for your friend.