Vermont Auto Insurance Requirements

Vermont's Mandatory Auto Insurance Law

Vermont requires all drivers to maintain liability insurance and uninsured/underinsured motorist coverage.

Minimum Liability Coverage (25/50/10)

Vermont requires these minimum liability limits:

Critical Exam Point: Vermont's minimum is written as 25/50/10 and is among the lowest in New England. However, Vermont ALSO requires higher UM/UIM limits (see below).

Uninsured/Underinsured Motorist Coverage (50/100/10)

Vermont REQUIRES UM/UIM coverage at these minimums:

CRITICAL EXAM POINT: Vermont's UM/UIM minimums (50/100/10) are HIGHER than the basic liability minimums (25/50/10). This is unusual—most states set UM/UIM equal to or lower than liability limits. This is frequently tested!

Why Vermont's UM/UIM is Higher

Vermont requires higher UM/UIM because:

• Protects Vermont drivers from underinsured out-of-state drivers
• Many drivers carry only state minimums (25/50/10)
• Provides better protection for Vermont residents
• Recognizes medical costs often exceed $25,000

Rejecting UM/UIM Coverage

While UM/UIM is mandatory, it can be rejected in writing:

Requirements to Reject:

• Must be in writing
• Must be signed by policyholder
• Insurer must offer coverage first
• Must be informed rejection
• Can be reinstated at any time

Effect of Rejection:

• UM/UIM coverage not provided
• Lower premiums (usually $50-150/year savings)
• Policyholder assumes risk of uninsured drivers

Exam Tip: Even though UM/UIM is "mandatory," Vermont allows informed written rejection. Without written rejection, UM/UIM coverage must be provided at minimums of 50/100/10.

Medical Payments Coverage

Vermont requires Medical Payments (Med Pay) coverage:

Med Pay Requirements

What Med Pay Covers

Covered Medical Expenses:

• Doctor and hospital bills
• Ambulance fees
• X-rays and diagnostic tests
• Surgery and medical procedures
• Rehabilitation expenses
• Funeral expenses (if death results)

Who's Covered:

• Named insured
• Family members in household
• Passengers in insured vehicle
• Named insured and family as pedestrians or bicyclists

No-Fault Coverage:

• Pays regardless of who caused accident
• Pays in addition to liability or UM/UIM coverage
• Coordinates with health insurance

Vermont Financial Responsibility Law

Vermont requires proof of financial responsibility:

Methods to Show Financial Responsibility

When Financial Responsibility Required

Always Required:

• Vehicle registration
• Operating vehicle on Vermont roads
• After at-fault accident
• After certain traffic violations

Penalties for No Insurance

Personal Auto Policy (PAP)

Vermont uses the standard Personal Auto Policy (PAP) form:

PAP Coverage Parts

Part A - Liability Coverage

Bodily Injury Liability:

• Pays for injuries you cause to others
• Covers medical expenses, lost wages, pain and suffering
• Legal defense costs (in addition to limits)
• Settlement negotiations

Property Damage Liability:

• Pays for property you damage in accident
• Other vehicles, buildings, fences, etc.
• Legal defense included

Single Limit vs. Split Limit:

• Split Limit (Vermont minimum): 25/50/10 (separate limits)
• Combined Single Limit (CSL): One limit for all (e.g., $300,000 CSL)

Part B - Medical Payments

Coverage Details:

• No-fault coverage
• Pays necessary medical expenses
• Within 3 years of accident
• No deductible
• Pays per person up to limit
• Coordinates with health insurance

Part C - Uninsured/Underinsured Motorists

Uninsured Motorist (UM):

• Covers you if hit by driver with NO insurance
• Covers hit-and-run accidents (if contact with vehicle)
• Covers you when struck as pedestrian by uninsured driver

Underinsured Motorist (UIM):

• Covers you if at-fault driver has insufficient insurance
• Pays difference between their limits and your damages (up to your UM limits)
• Protects against drivers carrying state minimums

Example UIM Scenario:

• Your damages: $75,000
• At-fault driver's liability limit: $25,000
• Your UIM coverage: $50,000
• You collect: $25,000 from at-fault driver + $50,000 from your UIM = $75,000

Part D - Physical Damage Coverage

Physical damage coverage is OPTIONAL (not required by Vermont law):

Collision Coverage:

• Pays for damage to your vehicle from collision with another vehicle or object
• Subject to deductible (typical: $250, $500, $1,000)
• Pays actual cash value or cost to repair (whichever is less)

Comprehensive Coverage:

• Pays for damage from non-collision perils
• Theft, vandalism, fire, flood, hitting animal, glass breakage
• Subject to deductible (often lower than collision deductible)
• Sometimes called "Other Than Collision" (OTC)

Vermont Winter Considerations:

• Hitting deer (common in Vermont): comprehensive coverage
• Sliding on ice into ditch: collision coverage
• Tree branch falling on car from ice storm: comprehensive
• Windshield damage from road debris: comprehensive (often no deductible)

Exam Tip: Collision covers colliding with another vehicle or object. Comprehensive covers almost everything else (theft, fire, weather, animals, vandalism). Both are optional in Vermont but required by lenders if vehicle is financed.

Vermont Auto Insurance Exclusions

Standard PAP exclusions apply in Vermont:

Liability Exclusions

Not Covered Under Liability:

• Intentional damage caused by insured
• Property owned or transported by insured
• Property rented to, used by, or in care of insured (except residence)
• Bodily injury to insured or family members
• Workers' compensation obligations
• Using vehicle as taxi or ride-share (without endorsement)
• Using vehicle for business (without endorsement)

Medical Payments Exclusions

• Injury during course of employment (workers' comp applies)
• Using vehicle as public livery
• Using vehicle without reasonable belief of permission

UM/UIM Exclusions

• Claim settled without insurer's consent
• Insured or family member is uninsured motorist causing loss
• Vehicle owned by insured but not listed on policy

Physical Damage Exclusions

Not Covered:

• Wear and tear, freezing, mechanical breakdown
• Road damage to tires (unless other loss)
• Loss due to war or nuclear hazard
• Loss to equipment not permanently installed
• Loss while used as livery

Vermont-Specific Auto Insurance Issues

Rural Vermont Driving Risks

Unique Risks:

• Animal Collisions: Deer very common (comprehensive coverage needed)
• Unpaved Roads: Damage from gravel, potholes (may not be covered)
• Winter Driving: Ice, snow causing accidents
• Limited Lighting: Rural roads darker, more accidents

Seasonal Vehicle Storage

Many Vermonters store vehicles in winter:

Insurance Options:

• Comprehensive-Only Coverage: Maintains coverage for theft/fire but removes liability/collision
• Cancel Coverage: If vehicle won't be driven (must notify DMV)
• Maintain Full Coverage: Required if loan on vehicle

Savings:

• Comprehensive-only reduces premiums 60-80%
• Vehicle must be stored, not driven
• Liability removed so vehicle cannot be legally operated

Young Drivers in Vermont

Vermont teen drivers face:

• Higher Premiums: Drivers under 25 pay significantly more
• Graduated Licensing: Restricts teen driving privileges
• Good Student Discounts: Available for good grades
• Driver Training Discounts: Completing driver's ed course

Vermont Auto Insurance Rate Factors

Insurers consider these factors:

Rating Factors

Vermont-Specific Rate Factors

• Garaging Location: Burlington, Rutland higher than rural areas
• Winter Driving: Higher accident rates increase overall premiums
• Deer Claims: Areas with frequent animal collisions may have higher comprehensive rates
• Limited Competition: Fewer insurers in Vermont = less competition on pricing

Vermont DMV and Insurance

Vermont DMV Insurance Requirements

At Registration:

• Must provide proof of insurance
• Insurance card or electronic proof acceptable
• Insurance must meet 25/50/10 + 50/100/10 UM/UIM minimums

Random Verification:

• Vermont DMV randomly checks insurance compliance
• Insurers report policy cancellations to DMV
• Uninsured vehicles subject to registration suspension

SR-22 (Certificate of Financial Responsibility)

Vermont requires SR-22 filing for high-risk drivers:

When SR-22 Required:

• DUI conviction
• Multiple serious violations
• At-fault accident without insurance
• Suspended/revoked license reinstatement

How SR-22 Works:

• Insurer files SR-22 with Vermont DMV electronically
• Proves continuous insurance coverage
• Required for 3-5 years (depending on offense)
• If insurance lapses, insurer notifies DMV → license suspended
• Costs $15-50 filing fee + higher insurance premiums

Commercial Auto Insurance

Vermont businesses needing commercial auto coverage:

When Commercial Auto Needed

• Vehicles owned by business
• Vehicles used for business purposes regularly
• Vehicles over certain weight (GVW)
• For-hire vehicles (taxis, delivery)

Business Auto Policy (BAP)

Similar to PAP but for business:

Covered Autos Designation:

• Symbol 1: Any Auto (broadest)
• Symbol 2: Owned Autos Only
• Symbol 7: Specifically Described Autos
• Symbol 8: Hired Autos Only
• Symbol 9: Non-Owned Autos Only

Vermont Farm Vehicles:

• Farm trucks and equipment
• May need farm auto coverage or inland marine
• Special agricultural endorsements available

Summary

Vermont auto insurance requirements:

Mandatory Coverage: ✓ Liability: 25/50/10 minimum ✓ UM/UIM: 50/100/10 minimum (can reject in writing) ✓ Medical Payments: Required (no specific minimum)

Optional Coverage:

• Collision coverage
• Comprehensive coverage
• Higher liability limits (highly recommended)
• Rental reimbursement
• Towing and labor

Key Vermont Points:

• UM/UIM limits (50/100/10) are HIGHER than liability minimums (25/50/10)
• UM/UIM can be rejected in writing but still mandatory otherwise
• Med Pay required
• Financial responsibility shown through insurance, bond, or deposit
• Penalties for uninsured driving are severe

Next section covers general liability and workers' compensation in Vermont.