Is Vermont a no-fault car insurance state?

New transplants to Vermont may be overtaken by the laid back lifestyle, but they should not become too complacent. Understanding the various insurance laws in the state assists the cause of protecting oneself financially.

Auto insurance, in particular, must be chosen wisely since causing a serious accident may bring the civil litigation hammer down hard.

The first question to ask in regards to auto insurance should be “Is Vermont a fault or no-fault state?” Maybe this should be the second question after asking “What is the difference between fault and no-fault?”

If you’re concerned about your car’s safety and want better car insurance, enter your ZIP code above and compare at least three to four policies today!

What is no-fault car insurance?

The differences between fault and no-fault car insurance are stark. Drivers may maintain their preferences as to which is better, but state law imposes a particular one irrespective of preferences.

— No-Fault Car Insurance Defined

No-fault car insurance refers to claims in which the policyholder seeks a settlement from their own insurance company regardless of the party at fault.

So, if someone was injured due to a driver running a red light and crashing into a vehicle, the injured party would not file a claim against the other driver’s auto liability policy and instead file a claim against their own insurance company’s personal injury protection (PIP) or medical payments coverage.

The ability to sue the other party is not completely eliminated, but the legal doorways to litigation narrow. Generally, the prevention of clogging the court system or complicating the insurance claim process motivates the development of no-fault laws.

— Fault-Based Insurance Defined

Fault-based insurance law, also known as tort-based auto insurance law, requires the person who caused injury, losses, or damage to be the one to pay. Of course, that person would be at fault provided they were legitimately negligent.

A court may decide so in a civil suit, or an insurance adjuster may offer a settlement to pay without civil proceedings.

Is Vermont a no-fault state?

Where does Vermont stand on the no-fault/tort divide? Vermont is a tort state.

Those who do not possess auto insurance or lack sufficient coverage would be financially liable for any judgments beyond what the insurance provider covers.

For this reason and more, procuring the right level of insurance in a fault/tort state is a must.

Residents choosing to drive in Vermont must accept the fact they can be held liable even for minor accidents. Minor accidents may even cause fairly significant medical bills so no one should assume a “fender bender” does not come with serious financial consequences.

Carrying liability insurance in Vermont is required by law. Additionally, Vermont mandates uninsured/underinsured motorist coverage in case the driver at fault causes an accident.

In such a scenario, the injured driver could file a claim with their own policy due to the other driver’s lacking or non-existent insurance coverage.

Being required to carry auto insurance does serve a driver’s best interests. Having insurance in place acts as a safety net in the advent of civil litigation.

Auto Insurance in Vermont

The state does impose minimum requirements for car insurance:

• $25,000 – Bodily injuries per person
• $50,000 — Bodily injuries when more than one person is injured per accident
• $10,000 — Property damage per accident

— A Unique Additional Option

Interestingly, Vermont also allows for the filing of a surety bond — a $115,000 bond — as a potential alternative to minimum insurance requirements.

The Vermont DMV refers to the bond as “evidence of self-insurance.” Drivers may wish to look at the surety bond option to see if they qualify.

Be forewarned, $115,000 still reflects an insufficient amount of coverage. Serious accidents may cost many times that amount.

— Penalties for Driving Without Insurance

Choosing to drive without insurance in Vermont would be a terrible idea on any level.

For one, a civil penalty of $500 may be imposed.

Paying a $500 fine pales in comparison to being stuck with a $500,000 civil judgment due to being at fault for a major accident.

In addition to the fine, two points are assessed against a driving record. Presenting proof of financial responsibility through an SR-22 form may be required in order to be allowed to drive in the state after being caught without insurance.

Purchasing auto liability and uninsured motorist coverage can be done very easily through comparison shopping. Along with acquiring mandatory insurance, you can also choose additional coverage  such as:

• Comprehensive
• Collision
• Medical payments insurance

Discounts may be possible depending on the applicant’s history and background or through insuring multiple cars or even bundling a car and policy.

Finding the Best Car Insurance Coverage in Vermont

Cost may be an impediment to buying the best insurance. Not knowing all the available insurance options further undermines the potential to access excellent coverage.

Looking at several different insurance policy quotes and making a clear comparison likely would help the cause of finding the best available insurance.

— Compare New Policies

First-time buyers are not the only consumers who should check out insurance quotes.

Looking into other available policies would be a good plan even for someone who already holds a valid policy.

Check out three to four new quotes every six months. Compare them to the current policy in hand. Make a switch or an upgrade if appropriate.

— Look Into the Insurer’s Financial Health

Purchasing insurance from a company comes with a risk. The company can only make settlements on claims if its financial health is strong.

A debt-ridden or financially mismanaged insurance company likely won’t be a good source of coverage.

— Ratings Websites

Reputable ratings services carefully examine the health of an insurance company to come with reliable rankings. The top websites for insurance ratings include:

• Fitch Ratings
• AM Best
• Standard & Poor’s
• Moody’s Investor Services

Looking at the ratings on these sites may prove exponentially helpful when trying to make a determination about what particular insurance company to go with.

— Consumer Websites

Consumer websites chronicle information which better educates those in the market for car insurance. Two solid and comprehensively-detailed websites are:

• JD Powers
• Consumer Reports

— Ask About Available Discounts

https://www.youtube.com/watch?v=bhb9wW2-U4I

Insurance companies do provide discounts capable of reducing the costs of an auto insurance policy. More discounts are available than the average consumer may realize.

Some of the more popular cost-saving discounts include:

• Anti-theft
• Good driver
• Good student
• Multiple policies and bundles
• Multiple-line
• Defensive driver course completion

Several of these discounts are based on the driver’s potential to reduce losses on the policy. Other discounts come from providing the insurance company with additional business.

No matter why or how the discount is put in place, the discount can save money.

Driving in Vermont requires car owners to be responsible. In addition to following all the rules of the road, drivers need to be held liable from an insurance perspective.

Vermont’s status as a tort state necessitates getting the right insurance in place.

If you live in Vermont and need better and more affordable auto insurance, start comparison shopping today by entering your ZIP code below!