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Vermont car insurance laws

Roadway Through Vermont
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According to the United States Census Bureau, Vermont had a population of just under 624,000 people in 2019. Although The Green Mountain State has a small population, its traffic statistics reflect the high cost to life and limb that roadway accidents inflict. According to the Vermont Highway Safety Office, in 2020:

  • 61 people died in traffic accidents, up from 47 in 2019
  • 50 people died in traffic accidents in rural areas
  • Impaired driving contributed to 44.26% of fatalities
  • Speeding contributed to 21.31% of fatalities
  • Older drivers contributed to 24.59% of fatalities
  • 202 people suffered serious injuries

Owning a car gives you the freedom of mobility, but it comes with responsibilities. Before getting behind the wheel, you need to buy auto insurance to meet or exceed the legal requirement. States require motorists to carry minimum levels of car insurance, and Vermont is no exception. If you drive without insurance in Vermont, you could lose your driving privilege and face costly fines.

Car insurance laws in Vermont

According to the Vermont Department of Financial Regulation, the state requires all drivers to carry minimum levels of liability and uninsured/underinsured motorist coverages:

  • Bodily injury liability per person: $ 25,000
  • Bodily injury liability per accident: $50,000
  • Property damage liability per accident: $10,000
  • Uninsured/underinsured motorist bodily injury per person: $50,000
  • Uninsured/underinsured motorist bodily injury per accident: $100,000
  • Uninsured/underinsured motorist property damage: $10,000 (maximum coverage available)

Drivers can elect to purchase more coverage for more financial protection, but they must meet at least these limits.

Liability insurance in Vermont

Vermont’s minimum liability insurance requirements may not provide all the protection you need. For one thing, liability insurance only pays for other people’s damages–it does not pay for your own vehicle’s damages or your medical bills.

Auto liability insurance also only pays up to the limit. If you do not carry enough insurance, you could face massive out-of-pocket costs if you are at fault for an accident. Consider this, Vermont only requires you to carry $10,000 in property damage liability, but if you total another driver’s 2021 Nissan Sentra, the replacement cost could exceed $20,000. And if the other driver sustains an injury, hospital expenses could cost $10,000 per day.

When buying bodily injury liability coverage, financial experts usually recommend carrying a minimum of $100,000 per person and $300,000 per accident. You may also want to carry at least $100,000 in property damage liability coverage if you can afford it.

Also consider purchasing a personal umbrella policy, which provides liability coverage of $1 million or more, for around $200 to $300 per year. Besides state-required insurance coverages, a leasing company or lender may also require you to buy collision and comprehensive coverages for a financed or leased automobile.

Is Vermont a no-fault state?

Some states have no-fault laws, which require all drivers to carry personal injury protection (PIP) coverage. No-fault laws require drivers to file claims with their insurance companies, regardless of who is deemed at fault for an accident, and limit the conditions in which drivers can sue for injuries and pain and suffering.

Vermont is not a no-fault state and does not require drivers to purchase PIP, making it easier for another driver to sue you if you are at fault for an accident. Your car insurance can help alleviate these costs if you have enough coverage.

Penalties for driving without insurance in Vermont

Driving without required auto insurance in Vermont can be costly and lead to a suspension of your driving privilege. Drivers caught driving without insurance are subject to a traffic violation and a fine of up to $500.

Vermont also requires you to provide proof of insurance. A digital insurance ID card stored on a mobile device such as a cellphone will suffice. If you are pulled over in a traffic stop and cannot provide proof of insurance, the law allows you to avoid a violation by providing proof within seven business days of the incident. A driver who cannot provide proof of insurance after seven days is subject to a fine of up to $100 and a suspended driver’s license.

Additional auto insurance coverage options in Vermont

For many automobile owners, minimum coverage may not provide all the protection they need. Leasing companies and lenders may require additional coverages for financed and leased vehicles. Drivers may also choose some types of optional coverages to maximize their protection.


Collision coverage pays to repair or replace your vehicle following a covered accident. Typically, this type of coverage is required by leasing companies and lenders for cars financed or leased. Insurance premiums are based on many specific factors, including the make and model of the automobile. Even if you have a clean driving record and do not have a history of filing car insurance claims, collision coverage can significantly increase your insurance rate. Once you make your last car payment, you have the option to drop collision coverage.


Like collision coverage, leasing companies and lenders usually require comprehensive coverage for financed and leased vehicles. Comprehensive coverage only pays to repair or replace vehicles that sustain covered losses other than collision damage. Covered losses may include those caused by fire, glass breakage, storms, theft or vandalism. For example, if someone steals your car, you can file a claim against your comprehensive coverage.

Although comprehensive coverage typically costs significantly less than collision coverage, the price you pay may depend on the type of car you drive. Comprehensive coverage may also cost more in locations with high car theft rates.

Medical payments

While not required by Vermont law, medical payments coverage provides good financial protection. Following a covered accident, medical payments coverage can help pay the medical expenses of you and your passengers, with no deductible, regardless of who was at fault for the collision.

Medical payments coverage can also pay the medical costs of you or members of your household who sustain injuries while riding in another person’s vehicle, when struck by a vehicle while walking or when riding on public transportation. Following a covered loss, this affordable coverage can help pay for ambulance service, doctor visits, emergency room services, health insurance co-pays and deductibles, hospital costs, nursing services and surgery costs.

Other optional coverage

Insurers offer a wide variety of optional coverages, which can vary among providers. Other common optional coverages include:

Frequently asked questions

What is the best car insurance company in Vermont?

Based on Bankrate’s research, the best car insurance companies in Vermont include Allstate, Geico, MetLife, State Farm and USAA. In J.D. Power’s 2021 U.S. Auto Insurance Study, Amica Mutual, Geico, State Farm and USAA earned above average overall customer satisfaction index scores for the New England region. However, the best for each person will depend on their priorities. Shop around and compare options to find which is the best for you.

What is the cheapest car insurance in Vermont?

According to Bankrate’s research, Allstate, Geico, Nationwide, State Farm and USAA offer the cheapest car insurance in Vermont. These carriers offer an average annual premium of $195 to $447 for minimum coverage and $807 to $1,893 for full coverage. But average premiums do not reflect the rate you will pay for auto insurance. For the most accurate rate, request quotes from several Vermont auto insurance companies.

Does Vermont require proof of insurance to register a vehicle?

According to the Vermont Department of Motor Vehicles, proof of insurance is not required when registering a vehicle. However, if you are caught driving without insurance, you could face fines and a suspended driver’s license.

Written by
Michael Evans
Former Personal Finance Contributor
Michael Evans is a former contributor to Bankrate and has worked in numerous industries, including education, finance, government, insurance and journalism. He began writing professionally while working for the world's first online mortgage brokerage in San Francisco, California. His writings have appeared in print and online publications, including Fox Business, International Living, Motley Fool and Yahoo Finance. He and his family divide their time between residences in Northern California and Colombia. When Michael is not writing, he enjoys working in his photography business and playing with his cat, Cyndi Lou.
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