Virginia’s Automobile Financial Responsibility Laws
Learn About the Minimum Insurance Requirements for Motor Vehicles in Virginia
Available insurance coverage is one of the pillars of a strong automobile accident case. Without it, there is a significant risk that you will be unable to collect monies from the at-fault driver – even if you prove that person drove negligently and a jury awards you damages.
The presence of insurance is only a start, though. An available liability insurance policy doesn’t guarantee that you will be able to collect enough money through a personal injury settlement or verdict to cover all your losses. When your damages, including medical bills, future medical expenses, wage loss, permanent impairment, disability, physical pain and suffering, and loss of enjoyment of life, exceed the policy limits of the at-fault driver, your recovery may be limited to the amount of available insurance coverage.
This article explains the minimum car insurance requirements in Virginia and how the other driver’s liability insurance and your underinsured and uninsured motorists’ coverage can determine how much you receive in a car accident settlement. It also discusses how much auto insurance you should purchase to protect yourself if you cause an accident or get hit by someone with inadequate policy limits.
Please keep reading to learn more about auto insurance requirements in Virginia. Check out the other articles on my website for more information on insurance’s role in personal injury actions.
If you have questions about your case or want a free consultation with one of the best Virginia car accident lawyers, call today: (804) 251-1620 or (757) 810-5614. I’m ready to help you and your family during this difficult time.
Is Virginia a No-Fault Auto Insurance State?
No. Virginia is not a no-fault state. It is a traditional tort liability state.
In states with no-fault auto insurance laws, every driver files a claim with their own insurance company after an accident, regardless of who was at fault. Twelve states use this system.
However, Virginia is a tort liability system, with no restrictions on civil actions arising from motor vehicle crashes. A driver found negligent in a car crash can be sued by the other driver and by the other driver’s passengers for losses related to the crash.
Purchasing motor vehicle insurance coverage is the best way to protect yourself financially if you cause a crash – and if you’re hurt in one.
Is Auto Insurance Mandatory in Virginia?
No. You do not have to purchase car insurance to drive a registered vehicle in Virginia. But suppose you decide not to buy bodily injury liability insurance. You must pay an Uninsured Motor Vehicle fee of $500 to the Department of Motor Vehicles (DMV) when you register the vehicle.
To register your vehicle or to purchase license plates or decals, you must certify that your car is covered by the minimum car insurance requirements or pay the Uninsured Motor Vehicle fee.
The Motor Vehicle Fee is not a one-time fee. It expires with your vehicle registration. You must pay it when you first register the vehicle, and every time you re-register the car, which is usually yearly.
Does the Uninsured Motorist Fee Provide Financial Protection if I Cause a Motor Vehicle Collision or Get Hurt in One?
No.
Paying the uninsured motorist fee allows you to drive on Virginia roads. But it doesn’t give you insurance or protect you financially. You remain exposed to the effects of a motor vehicle collision.
Suppose a judge or jury finds you negligent and at-fault for a motor vehicle collision. In that case, the victim can try to take your assets, income, or property to satisfy the personal injury judgment.
Or suppose an uninsured driver strikes you, causing severe injuries. You may have no way to recover money for your losses unless the uninsured driver has assets you can pursue, or you have purchased the right auto insurance coverage for yourself.
If I Purchase Auto Insurance, Is There a Minimum Amount I Must Buy? Understanding Virginia Liability Coverage Requirements
Yes. There are minimum car insurance requirements in Virginia.
If you purchase auto insurance coverage, Virginia law requires you to carry a minimum amount of insurance and to have bodily injury liability, property damage liability, uninsured motorist coverage, and underinsured motorist coverage. The other types of auto insurance coverage are optional.
The minimum amount of liability coverage required for drivers in Virginia is:
- Bodily Injury or Death: $25,000.00 per person and $50,000.00 per accident if two or more persons are hurt or killed
- Property Damage: $20,000.00 per accident. This coverage pays for damage that a driver causes to another vehicle or property, such as a house, building, fence, or utility pole.
- Uninsured Motorist Bodily Injury: $25,000 per person and $50,000 per accident
- Uninsured Motorist Property Damage: $20,000.00 per accident with a $200 deductible for hit and run accidents.
Purchasing a $25,000/$50,000 policy means that if you are found at fault for a motor vehicle collision, you receive only $25,000 in protection for the death or injury of any one person and total coverage of $50,000 for all injuries or deaths in a single accident.
What Happens if I Cause the Traffic Collision and the Injured Person’s Damages Exceed My Insurance Policy Limits?
Your insurance company will protect your assets up to your policy limits if you cause the crash. The policy limits are the maximum amounts your insurance will pay.
If the other person’s damages exceed your liability insurance coverage limits, you are exposed financially. That person can use the judgment against you to pursue your assets, such as your house, car, personal property, or any checking or savings accounts you have, and garnish your wages until the judgment debt is paid.
An unsatisfied judgment can also destroy your credit, making it difficult for you to recover financially.
What if an Uninsured Driver Injures Me?
An unfortunate but common situation is when a person with no insurance causes the car crash.
If you have auto liability insurance on your vehicle, you should also have uninsured motorist coverage. Uninsured motorist coverage, also called UM coverage, provides insurance coverage to you if the at-fault driver does not have an active auto insurance policy.
Under Virginia law, you receive uninsured motorist coverage when you buy bodily injury liability and property damage insurance – unless you specifically decline the UM coverage.
The uninsured motorist coverage has the same policy limits as the bodily injury liability coverage. Suppose you carry the required minimum insurance coverage of $25,000 and get injured by an uninsured driver with no assets. In that case, you will probably recover only $25,000 through your UM coverage – even if you suffered a catastrophic injury such as traumatic brain injury.
Similarly, the most you will recover for property damage to your vehicle or home is $20,000, with a $200 deductible for hit and run accidents.
As you can see, the amount you recover will likely be inadequate – unless you purchased sufficient insurance for this scenario.
What if a Driver with the Minimum Amount of Insurance Coverage Injures Me and I Have Significant Losses?
If the at-fault driver is insured but does not have sufficient insurance coverage to pay your damages, you may recover through underinsured motorist coverage.
Underinsured motorist coverage, also called UIM coverage, is included when you purchase bodily injury liability insurance – unless you specifically decline it. UIM coverage protects you if you are hurt by someone who did not buy sufficient coverage to pay your claim.
As with UM coverage, your UIM coverage limits are the same as the policy limits of your bodily injury liability coverage.
Here is how UIM coverage works.
Suppose you suffer a back injury in a car crash and require spinal fusion surgery. Your medical bills alone will probably exceed $150,000.
If the person who caused the automobile wreck has only $25,000 in coverage, it is likely that it is all you will recover. You will have to pay the rest of the medical bill and may receive nothing for your lost wages, disability, and pain and suffering.
However, suppose you have policy limits of $150,000 or more under your auto insurance policy. In that case, the other driver’s insurance will pay the first $25,000, and your UIM coverage will pay the remaining $125,000 or more, up to your policy limits.
Do the Minimum Car Insurance Limits Ever Change?
Yes – if the General Assembly changes them.
The minimum automobile liability insurance limits have been in place for years. Meanwhile, medical costs have increased at a higher rate than almost anything else. This creates a situation where you do not have adequate protection if you purchase the minimum amount of car insurance required.
Understanding how low the minimum insurance requirements are, State Senator Scott Surovell introduced a bill to increase the liability insurance coverage limits in 2020.
This bill, Senate Bill 664, would have increased the minimum auto liability insurance amounts from $25,000 to $35,000 in cases of physical harm to or death of one person, from $50,000 to $70,000 in cases of bodily injury to or death of more than one person in any one accident, and $20,000 to $40,000 for property damage coverage.
The bill passed in the Virginia Senate, but didn’t make it out of committee in the Virginia House of Representatives.
I’ll be monitoring future attempts to increase the minimum policy limits for bodily injury liability and property damage liability insurance. This most recent attempt was a step in the right direction.
How Much Auto Insurance Should I Buy? Determining the Right Amount of Car Insurance Coverage for You
If you couldn’t tell, I think the minimum insurance requirements are inadequate to provide real protection to those who cause or suffer severe injuries in an auto accident. Fortunately, you get to select your auto insurance coverage limits in Virginia.
Deciding how much car insurance coverage you need is difficult because it is expensive, and there are multiple unknowns. For example:
- You do not know if you will be involved in a motor vehicle accident.
- You do not know how much damage there will be if you are.
- You do not know how much auto insurance coverage the other driver will have if that driver is at fault.
Despite these unknowns, there are some general guidelines to follow when selecting the policy limits for your auto insurance coverage.
- The more you have to lose financially, the higher your policy limits should be.
- Auto insurance’s purpose is to protect you, your family, and your finances if you cause a motor vehicle accident and protect you if you’re hurt in a crash where the negligent driver is uninsured or has inadequate coverage. Even you don’t cause the accident, you and your family may suffer if the at-fault driver was not financially responsible.
- Meet with an insurance agent to discuss the types of auto insurance coverage available and how they work together.
- Make sure you understand what coverage your motor vehicle insurance policy includes. For example, you should know if the policy provides: liability coverage for bodily injury, death, and property damage; collision coverage; comprehensive coverage; medical expense and loss of income benefits; and uninsured and underinsured insurance coverage – to name a few.
- Review your other insurance coverage to see what type of protection you have. For example, you may get away with minimum Medical Payments (“MedPay”) coverage if you have private health insurance with a low deductible.
My advice – buy as much auto liability insurance coverage as you can afford. I’ve spoken with too many people who have been involved in an automobile accident and find out they do not have adequate insurance coverage to protect them. Now is the time to act to put yourself in the best position possible, regardless of whether you are found responsible for the accident or suffer injuries because of someone else.
What is the Penalty for Failing to Comply with the Insurance Requirement or Pay the Uninsured Motor Vehicle Fee?
There are penalties for failing to comply with the minimum insurance requirements or pay the Uninsured Motor Vehicle Fee.
Suppose the insurance coverage on your vehicle terminates during the registration period. In that case, you must reinsure the car, pay the Uninsured Motor Vehicle fee, deactivate your license plates, or surrender your license plates to the DMV.
Vehicle owners who are uninsured or have not paid the $500 fee will lose their driving and vehicle registration privileges. The DMV will not reinstate your privileges until you pay a $600 noncompliance fee, file a Financial Responsibility Insurance Certificate (SR-22) for three years, and pay a reinstatement fee.
Hire a Car Accident Lawyer in Virginia
If you’re involved in an automobile accident and are unsure of your rights and insurance coverage, I can help.
Deciding how to recover the maximum amount for your damages is complicated, but a thorough investigation and the right strategy can put more money in your pocket.
If you’d like a free consultation, call me: (804) 251-1620 or (757) 810-5614. See why my peers have voted me one of the best personal injury attorneys in the state.
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