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Vermont Car Insurance Laws & State Minimum Coverage Limits

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best...

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UPDATED: Jan 25, 2019

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Vermont has a financial responsibility law in place that requires all drivers to carry a minimum amount of insurance to cover the cost of injuries and property damage in the event of an accident. This insurance protects both the victims and the at-fault driver from financial hardships after an accident.

Mandatory Coverage

In Vermont, insurance requirements include both liability and uninsured motorist coverage to protect drivers and passengers from multiple angles. The minimum required coverage limits are:

  • Bodily injury coverage in the amount of $25,000 per person and $50,000 per incident for all persons injured in a single accident in which the insured driver is at fault.
  • Property damage coverage in the amount of $10,000 to pay for damage caused to another person’s vehicle or any other property in an at-fault accident.
  • Uninsured Motorist bodily injury coverage in the amount of $50,000 per person and $100,000 per incident to pay for injuries done by a driver who has no insurance or whose insurance is not sufficient.
  • Uninsured Motorist property damage coverage in the amount of $10,000 to pay for damage to property done by a driver who is uninsured or who does not have enough coverage, subject to a $150 deductible.

In addition to this mandatory coverage, many drivers choose to add extra protection beyond what is required by law. There are a number of options that can be added to create a comprehensive policy.

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Optional Coverage

One of the first options to consider for additional protection is increased liability limits. The legal minimum may not be enough to provide full protection from financial hardships in a serious accident.

In addition to higher liability limits, there are a number of other common coverage options to choose from:

  • Collision coverage to pay for damage done to your vehicle in the event of an at-fault accident. This coverage is accompanied by a deductible.
  • Comprehensive coverage to pay for damage to your vehicle in any non-collision incident, such as theft, vandalism, weather, or fire.
  • Medical Payments coverage to pay for medical expenses not covered elsewhere regardless of who is at fault
  • Rental Reimbursement coverage to pay for a rental car during a covered claim
  • Towing and Labor coverage to pay for roadside assistance in a non-collision incident

Insurance companies differ as to what they offer, and most companies have other options to choose from as well. This allows each driver to create the policy that suits his or her particular needs.

Proof of Insurance Laws and Penalties

Drivers in Vermont are required by law to carry proof of insurance and present it to police on request at a traffic stop or at the scene of an accident. Failure to provide proof of insurance will result in a citation. The driver will then have seven days to provide proof of insurance, or a fine of up to $100 will be issued.

A driver who drives uninsured can also be subject to further penalties, including:

  • Points assessed against the driver’s license
  • Civil fines of up to $500
  • Requirement for a filing of financial responsibility insurance

Financial Responsibility Insurance is a filing that is provided by an insurance company to prove that the driver is meeting all of the legal requirements for coverage. If the policy is canceled or lapses in any other way the driver will face further legal consequences.

Shopping for Car Insurance in Vermont

Vermont drivers enjoy some of the lowest car insurance rates in the nation. According to a 2017 study of car insurance rates, Vermont ranks 48th, well below the national average. At $948 per year based on the sample rates, Vermont falls several hundred dollars below the $1318 national average.

The Vermont Department of Insurance provides drivers with assistance in selecting their auto insurance in order to help them find both the right coverage and the right price. Their Consumer’s Guide to Auto Insurance provides information on coverage as well as on how policies are rated.

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High-Risk Drivers in Vermont

High-risk drivers are those that have multiple tickets and accidents, serious violations, or other issues that result in higher rates or difficulty obtaining insurance on the open market. Some drivers may have issues that cause them to be unable to obtain insurance at all. This segment of the population can turn to a specific program that is designed to help.

The Vermont Automobile Insurance Plan helps drivers who qualify for the program to obtain insurance through an assigned risk system. The program is open to those who have attempted to obtain legally required insurance and been turned down within the past 60 days.

This is the last resort option for insurance and will be expensive due to the increased cost of insuring high-risk drivers.

Teen Drivers in Vermont

Vermont uses a graduated licensing system to train new drivers and help them learn the skills they need to become safe and responsible on the road. Each stage has restrictions and requirements that are part of the learning process.

Learner’s Permit

Teens can obtain a learner’s permit at the age of 15. During the learner’s permit phase, the teen can begin driving under supervision. Driving is only permitted when one of the following people is in the passenger seat:

  • An unimpaired parent or guardian
  • A certified driving instructor
  • An unimpaired driver who is fully licensed and over the age of 25

During this phase, the teen driver may not use any sort of portable device while driving and must complete the requirements for the next stage in order to move on.

Junior Driver’s License

This license can be obtained at the age of 16, as long as the teen meets these requirements:

  • Must hold a learner’s permit for at least one year
  • Must complete an approved driver education course
  • Must complete 40 hours of driving practice outside of driver education, with at least 10 of those hours at night
  • Have had a violation free driving record for 6 months
  • Must pass a road test

With this license the teen can drive unsupervised as long as they are in compliance with these restrictions:

  • No passengers are permitted for the first three months unless a supervising driver is in the car
  • Only passengers who are family are permitted for the second three months unless a supervising driver is in the car
  • Driving for employment purposes is not permitted until the license has been held for one year or the driver turns 18

Full License

The teen will graduate to a full license at the age of 18, as long as they have held a Junior license for at least 6 months and have had no violations in that same time period.

Teen drivers in Vermont must meet all financial responsibility requirements; this means they must be insured. A parent or guardian can add a teen to their insurance policy and keep that driver insured that way even when at school until the teen establishes his or her own permanent residence.

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About Eric Stauffer

Author: Eric StaufferI am a former insurance agent and banker turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

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