Virginia's New Car Insurance Law Aims to Bring Down Premiums. Here's What It Means for You

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For years, New Hampshire and Virginia were the only two states in the U.S. that didn't require their drivers to carry a minimum amount of liability insurance to protect others on the road. But that didn't mean drivers avoided liability for their actions behind the wheel altogether. In Virginia, drivers who opted to avoid insurance paid a $500 uninsured motorist fee annually.

But that option went away as of July 1, 2024. The state hopes that the change to mandatory auto insurance will reduce premiums over time. Here's what all Virginia drivers need to know.

Car insurance is now required

Car insurance rates have been skyrocketing across the country due to inflation, but Virginia drivers have been hit especially hard due to the number of uninsured motorist claims insurers have had to pay out. Just over 12% of Virginia drivers were uninsured in 2022, according to the Insurance Information Institute (III).

This poses a problem even for insured drivers. Since insurance companies know there's a decent chance they could have to pay for damages their drivers didn't cause, they increase their premiums to account for this. The intention behind requiring all drivers to get insurance is to ideally reduce the rate of uninsured motorist claims, which may then allow car insurance companies to reduce their rates.

Drivers are required to have $30,000 of bodily injury liability coverage per person and $60,000 per accident as well as $20,000 of property damage liability coverage. This is sometimes written as 30/60/20 coverage. Beginning in 2025, minimum car insurance requirements will jump to 50/100/25 -- higher than what many other states require.

What this means for drivers

Drivers who already have car insurance coverage at or above the state minimum requirements won't notice any change, at least in the near term. If all goes according to plan, rates may drop in the future -- or at least climb more slowly. But that remains to be seen.

Drivers without insurance must obtain it as quickly as possible, as the new law is already in effect. It's best to compare rates from three to five companies to see which offers the cheapest car insurance with the greatest coverage.

Those who haven't had insurance in the past may find themselves paying more than the $500 uninsured motorist fee initially. But it's still worth the investment. Failing to maintain state minimum car insurance could lead to license and registration suspension, as well as hefty fines. And that doesn't include the out-of-pocket costs drivers might incur if they cause an accident.

There are better ways to reduce car insurance costs. In addition to shopping around, drivers can try raising their policy's deductible. This increases their out-of-pocket costs in an accident, but it can significantly reduce monthly premiums. Keep shopping around for new coverage every year or two, as well. As drivers establish a safe driving record, more affordable rates may become available to them.

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