Vermont has the cheapest car insurance in the country, with an average yearly cost of just $995. If you are moving to Vermont from another state, your insurance premiums may decrease. Be aware, however, that the average cost is not indicative of all policies in the state; the specific cost of your auto insurance policy will vary depending on the amount of coverage you carry, your driving record and several other factors.

There are many geographical factors taken into account when determining auto insurance. An area’s size, population, crime rate and weather all affect insurance costs. The largest factors influencing auto insurance costs are the number of uninsured motorists in an area and the number of accidents that occur. In order to recover the cost of an insurance claim, the company will increase its rates for the area. This means that every time any person is involved in an accident, your rates may be somewhat affected.

Why is car insurance so cheap in Vermont?

Vermont is a small state, geographically, and also has a comparably low population. This means that there are fewer drivers on the road at any moment who can get into car accidents. In fact, Vermont has the 5th lowest population of licensed drivers of any state, surpassed only by Alaska, Wyoming, North Dakota and District of Columbia. There are roughly 313,000 drivers in Vermont. Compared to states with very high insurance premiums, this is a tiny population; Michigan, for example, has the most expensive insurance in the country and insures over 7 million drivers.

Vermont’s physical size also plays an important role in its insurance costs. Other states, like California, are very large and require lengthy drives from one city to the next. More compact states like Vermont require shorter commutes between cities and have more rural areas, which means that there is less traffic throughout much of the state.

Drunk driving is much less common in Vermont than in other states, which is a major contributor to the cost of its car insurance. In 2008, for example, only 15 people were killed as a result of a drunk driving accident; comparatively, Michigan had 331 DUI-related deaths that same year.

Uninsured motorists are also not as much of a problem in Vermont than in other states. Only 6 percent of drivers in Vermont are uninsured, making this one of the most fully-insured states in the country. Michigan is 17 percent uninsured and New Mexico has one of the highest rares of uninsured motorists in the company, 26 percent. Both states have rates substantially higher than Vermont’s for precisely this reason.

Car Insurance Requirements in Vermont

In order to insure a vehicle in Vermont, you must carry a minimum of $10,000 in property damage liability coverage, as well as $25,000 per person for bodily injury liability, up to $50,000 per person. These are fairly low limits that can easily be exhausted in a severe crash or an accident involving multiple vehicles. In order to avoid risking your assets in a lawsuit, you may wish to increase your limits of liability, especially for property damage.

If you have evidence of having at least $115,000 set aside to cover any potential accidents, you can claim yourself as self-insured instead. You can provide your proof of this money to the DMV and register your vehicle without purchasing any auto insurance. If you choose to go this route, you must pay for any accidents that occur out of your own pocket. This includes damage to your own vehicle, damage to another vehicle and injuries for everyone involved. It’s not uncommon for severe injuries to exhaust that threshold very quickly, so you might end up paying even more out of pocket. It’s usually safer and more affordable to buy the insurance, especially since premiums are so low in the area.

You can also purchase collision and comprehensive coverage for your vehicle. If you are financing the car, full coverage insurance is required until the lien is paid off. Otherwise, you can choose to carry liability-only coverage if your vehicle is not worth repairing after an accident. New or valuable vehicles should always have full coverage insurance, however, unless you’re willing to pay a substantial sum to replace them.

Uninsured motorist coverage is optional in Vermont

You can choose to carry injury or property damage coverage to repair your own vehicle in the event that an uninsured driver hits your car. Because of the relatively low rate of uninsured motorists in the state, you may decide that the expense is unnecessary, but it’s a valuable option to have for some people. This coverage usually has the same limit as your own liability insurance.

You can also choose to add first-party medical coverage to your policy. Vermont is considered a tort state, meaning that fault is assigned in accidents and you can pursue the at-fault party privately or through insurance in order to receive money for your claim. This means that if you are injured as a result of an accident in Vermont, you can sue the person who was responsible for the accident. Nevertheless, the lawsuit process may take a while, so it’s good to have at least a small amount of injury coverage available to you especially if your medical insurance has a high deductible.

Whether you’re moving to Vermont or simply shopping for inexpensive new insurance, you can begin by receiving a free quote online. Once you’ve obtained a quote, you can contact that company to confirm any details about your policy and see if there are any discounts you may qualify for. Depending on your credit history and driving record, your insurance premiums may be even lower than the average in the state.