Vermont Car Insurance Requirements

In Vermont, as in every state, car insurance is sure to play a big part in any claim brought after a car accident. Read on for the details of Vermont's auto insurance requirements, how coverage affects claims made in the wake of a crash, and the kinds of penalties you're likely to face if you drive without insurance in Vermont.

Vermont is a "Fault" Car Accident State

Vermont follows a traditional "fault"-based system when it comes to financial responsibility for losses stemming from a car accident: injuries, lost income, vehicle damage, and so on. This means that the person who was at fault for causing the car accident is also responsible for any resulting harm (from a practical standpoint, the at-fault driver's insurance carrier will absorb these losses, up to policy limits).

In Vermont, a person who suffers any kind of injury or damage due to an auto accident usually can proceed in one of three ways:

• by filing a claim with his or her own insurance company, assuming that the loss is covered under the policy (in this situation, the injured person's insurance company will likely turn around and pursue a subrogation claim against the at-fault driver's carrier)
• by filing a third-party claim directly with the at-fault driver's insurance carrier, or
• by filing a personal injury lawsuit in civil court against the at-fault driver.

Note: In no-fault car insurance states, a claimant doesn't usually have this same range of options. After a car accident in a no-fault state, you must turn to the personal injury protection coverage of your own car insurance policy for payment of medical bills and other out-of-pocket losses, regardless of who caused the crash. Only if your injuries reach a certain threshold can you step outside of no-fault and make a claim directly against the at-fault driver. But Vermont drivers don't need to worry about no-fault after an in-state accident.

Car Insurance Requirements in Vermont

According to the official Vermont Statutes (specifically, 23 V.S.A. section 800), the required minimum amounts of liability car insurance in Vermont are:

• $25,000 liability coverage for bodily injury or death of one person in an accident caused by the owner/driver of the insured vehicle
• $50,000 liability coverage for total bodily injury or death liability in an accident caused by the owner/driver of the insured vehicle
• $10,000 liability coverage for property damage per accident caused by the owner/driver of the insured vehicle.

For vehicle owners who don't purchase liability insurance, filing evidence of $115,000 in self-insurance is also an option in Vermont. This proof must be filed with the state's Commissioner of Motor Vehicles, according to 23 V.S.A. section 800.

Liability coverage pays the medical bills, property damage bills, and other costs of drivers, passengers, and pedestrians who are injured or have their vehicle damaged in a car accident you cause, up to coverage limits. You can (and in some situations should) carry more coverage to protect you in case a serious crash results in significant car accident injuries and vehicle damage. Once policy limits are exhausted, you are personally on the financial hook, so higher insurance limits can help protect your personal assets in the event of a serious crash.

Your liability coverage will kick in if any family member is driving your vehicle, or if you've given someone else permission to use it. It will likely also cover you if you get into an accident in a rental car.

Remember that liability coverage doesn't apply to your own injuries or vehicle damage after a Vermont car accident. You'll need different (additional) coverage for that if you're involved in a car accident and no one else's coverage applies to your losses. For example, collision coverage (optional in Vermont) can pay for repairs to (or replacement of) your damaged vehicle after a car accident. Note that collision or comprehensive might be required under the terms of a vehicle lease or financing agreement.

Uninsured motorist (UM) coverage is also required in Vermont, according to 23 V.S.A. section 941. This kind of coverage protects you and your passengers if the at-fault driver has no insurance, or if you're injured in a hit and run accident. For injury, required UM minimums limits in Vermont are $50,000 per person/ $100,000 total per accident. For property damage (damage to your own vehicle, for example) there is a maximum limit of $10,000 for UM coverage.

Driving Without Insurance in Vermont

According to the Vermont Department of Motor Vehicles, anyone who operates (or permits operation) of an uninsured vehicle may be issued a traffic ticket which can result in a fine, assessment of points against driving privileges, and/or driver's license suspension.

Of course, that's all in addition to serious financial consequences if you cause a car accident and you don't have car insurance.