Car insurance in Vermont

What Vermont law requires

Vermont requires every registered vehicle to be covered by a liability policy (or bond) before it goes on the road. The floors set by law are:

Liability pays other people when you are the one who caused the crash — their injuries, their vehicle, their damaged property. It pays nothing toward your own car or your own medical bills.

Vermont also makes uninsured/underinsured motorist (UM/UIM) coverage mandatory, and its bodily injury floor is higher than the liability floor: $50,000 per injured person, with a correspondingly higher per-crash limit, plus a capped amount of UM property damage coverage subject to a small statutory deductible. Source: the Vermont Department of Financial Regulation's Consumer's Guide to Auto Insurance.

Vermont does not require personal injury protection (PIP). You must be able to show proof of coverage when asked — keep your insurance ID card, paper or electronic, in the car. Driving without the required coverage is a traffic violation carrying a civil penalty, and after a serious violation or an uninsured crash the DMV can require your insurer to file an SR-22 certificate confirming you are complying with the financial responsibility law. If that policy is later cancelled or non-renewed, the insurer has to tell the DMV.

For context on cost: the NAIC reported an average Vermont premium of $958 in 2023 for liability, collision and comprehensive combined, per insured vehicle. That is a statewide average across all drivers and cars, not a quote — your own figure depends on your record, vehicle, location and coverage choices.

Fault and how claims actually work

Vermont is an at-fault (tort) state. Whoever caused the crash — through their insurer — is responsible for the resulting injuries and damage, and an injured person can claim against that driver's liability policy or sue them directly.

Fault is rarely all-or-nothing. Vermont applies comparative negligence, so if you are found partly responsible, the other driver's insurer may reduce what it pays you by your share of the blame. DFR's consumer guide uses a straightforward example: a driver found 50% responsible can expect the other side to pay only half the loss. Two practical consequences:

• Fight an unfair fault split early, with evidence (photos, the police crash report, dash-cam video, independent witnesses). Once a percentage is baked into the file it is harder to move.
• Collision coverage on your own policy can cover the gap your reduced recovery leaves, subject to your deductible.

Choosing a route after a crash. You can claim against the at-fault driver's insurer (a third-party claim) or, if you carry the coverage, against your own insurer (first-party) and let it chase the other side for your deductible. The first-party route is usually faster; the third-party route is the only way to recover pain and suffering.

Timeliness. Vermont insurers are required to handle claims in a timely way, and DFR tells consumers to contact its Consumer Services if a company is sitting on a claim.

Your car, your repair shop. DFR is explicit that the final decision on where your vehicle is repaired is yours, even when the insurer is paying and suggests a shop in its network. The flip side: deciding whether to repair or declare the car a total loss is the insurer's call, and it can total a vehicle when repair costs approach or exceed the car's actual cash value.

Because Vermont has no PIP, your own early medical bills are handled by your health insurance, by optional medical payments coverage, or by the at-fault driver's liability insurer at the end of the claim — which can be months later.

Uninsured and underinsured motorist coverage: the big one in Vermont

UM/UIM is not an upsell here — it is mandatory, and the law sets its per-person bodily injury minimum above the liability minimum, at $50,000 per injured person, with a higher per-crash limit and a capped amount of property damage cover.

What it does:

• Uninsured motorist pays for injuries to you and your passengers when the at-fault driver has no insurance (or, commonly, in a hit-and-run).
• Underinsured motorist fills the gap when the at-fault driver is insured but their limits are too small to cover what they did to you.

The second scenario is the common one. Plenty of drivers carry only the state floor, so a crash producing serious injuries can blow through a $25,000-per-person liability limit quickly — and then the only money left is your own UIM. For that reason, many Vermonters buy UM/UIM well above the minimum and, sensibly, match it to their liability limits.

When you raise liability, ask what happens to UM/UIM. Carrying high liability (which protects other people from you) with bare-minimum UM/UIM (which protects you from them) is a common and avoidable mismatch.

Optional coverage worth paying for

DFR's guide lists five optional coverages alongside the two mandatory ones. The ones that matter most in Vermont:

• Collision — damage to your own car from hitting another vehicle or object, including rollovers on back roads and winter slide-offs. Required by any lender or lessor. You choose the deductible; a higher one lowers the premium.
• Comprehensive ("other than collision") — theft, fire, vandalism, hail, flood, falling objects, glass breakage, and, as DFR spells out, contact with a bird or animal, including collisions with deer or moose. In a state with this much wildlife on rural roads at dusk, that one line is reason enough for many drivers to keep comprehensive even on an older vehicle.
• Medical payments — pays medical bills for you and your passengers regardless of fault. Because Vermont has no PIP, this is the coverage that gets bills paid immediately rather than at the end of a liability claim, and it covers health-plan deductibles and co-pays.
• Rental reimbursement and towing and labor — modest coverages that matter more when the nearest body shop or tow is a long way off.

Also worth considering: higher liability limits. The state floor is a legislative minimum, not a measure of what a serious crash costs. DFR's own guide notes that some consider the minimums insufficient and that anyone with real assets to protect, such as a home, should buy more. Raising liability from the floor is usually one of the cheaper upgrades on a policy; an umbrella policy sits above it.

If you drop a coverage to save money, drop it knowingly — and never drop below the mandatory liability and UM/UIM floors, which is not legal.

Rules and habits that trip Vermont drivers up

• Credit history affects your price. Vermont permits insurance credit scoring, and DFR notes it is a rating element for most companies. Under the federal Fair Credit Reporting Act, if credit information causes an adverse action — a denial, a cancellation, or a higher premium — the insurer must tell you, identify the credit elements that hurt your score, and name the reporting agency so you can check the file for errors.
• Everyone in the household counts. DFR confirms that a relative's poor driving record can raise your premium if that person lives with you, because household residents are generally insured as drivers of your car. Conversely, don't quietly leave a licensed household member off the policy.
• Permissive use. Lend your car with your permission and your liability coverage generally follows the car and the borrower.
• Cancellation isn't unlimited — after the first 59 days. In the opening 59 days of a policy an insurer may cancel for any reason. Once the policy has been in force 60 days or more, DFR says cancellation is generally limited to non-payment of premium, non-compliance with policy terms, fraud or material misrepresentation, and suspension or revocation of a covered person's licence. Written notice is required, with the notice period depending on the reason. If you think you were dropped unfairly or without proper notice, DFR will look at it.
• Non-renewal is different from cancellation, and so are the notice rules — read any letter carefully and act before the date on it, because a lapse is both a violation and an expensive thing to fix.
• SR-22 filings follow serious violations or an uninsured crash; your insurer makes the filing with the DMV and must notify the DMV if coverage ends.
• Report the crash, keep the paperwork. Photos, the other driver's details, the crash report number and every letter from an adjuster are what win disputed claims later.
• Shop the renewal. A state market survey cited by DFR found that what different companies charge for virtually the same coverage varies widely, so compare identical limits and deductibles — like with like — rather than assuming your current insurer is still competitive.

How to complain to the Vermont regulator

Auto insurance in Vermont is regulated by the Insurance Division of the Vermont Department of Financial Regulation (DFR), which oversees insurance companies, agents and adjusters doing business in the state and investigates consumer complaints.

Before you file: put your complaint to the insurer in writing, ask for its final position and the policy language it relies on, and gather the declarations page, correspondence, the claim number, the adjuster's name, and the estimates or bills in dispute.

Then:

1. File with DFR online through its complaint pages at dfr.vermont.gov, or submit the complaint form by mail or fax. You will generally need to attach supporting documents, so DFR suggests phoning first.
2. Call Consumer Services at 800-964-1784 (or 802-828-3302) or email dfr.insuranceinfo@vermont.gov to discuss a complaint or get help filing one. Walk-in appointments are not currently available; the Division asks you to contact it to arrange a phone, virtual or in-person meeting.
3. Mail goes to the Vermont Insurance Division, Department of Financial Regulation, 89 Main Street, Montpelier, VT 05620-3101.

DFR will take up the matter with the company and tell you what it finds. It can act on unfair claim handling, improper cancellation or non-renewal, and licensing misconduct — but it is not a court and will not decide a contested question of fault or the value of an injury claim. For those, your options are negotiation, an appraisal or arbitration clause in the policy, or a lawyer.

You can also use DFR to check that a company or agent is licensed in Vermont before you buy, and to ask about any record of consumer complaints or agent discipline. Treat the existence of a complaint as noise; a pattern is the signal.