As of today, Virginia is one of only two states in the country where auto insurance is optional. Per existing rules, a vehicle owner must either have minimum insurance as defined in Virginia Code 46.2-472 or pay the Uninsured Motor Vehicle (UMV) fee. The UMV fee, which started at $15 in the 1950s, is $500 per car per year at present.
Here, it is important to note that the UMV fee does not provide any insurance coverage and any liability arising from an accident is the vehicle owner’s responsibility. The UMV fee that is paid is deposited in a special fund known as the Uninsured Motorists Fund, which helps the state reduce the cost of insurance coverage for uninsured motorists.
New laws coming into effect soon
Last year, lawmakers passed Senate Bill 951 and it comes into effect in July this year. According to SB 951, by July 1, all vehicle owners in the state must have at least the minimum insurance coverage for them to be able to register a car. In the event of failure to comply with this law within one month, a vehicle owner’s license will be suspended.
The minimum liability insurance limits are also set to increase. Up to December 2024, minimum liability requirements are $30,000 for injury or death of one person, $50,000 for injury or death of two or more persons, and $20,000 for property damage. From January 2025, the amounts will be $50,000, $100,000 and $25,000, respectively.
What does it mean for crash victims?
According to the consumer advocacy group Insurance Information Institute, about 12 percent drivers in Virginia were uninsured in 2022. However, the costs of buying insurance can pose a challenge to prompt compliance as average car insurance prices increased by 22 percent since March 2023, per data from the Bureau of Labor Statistics.
That said, liability insurance can go a long way in helping car accident victims in the event of a crash where the other party was at fault. Compensation from uninsured drivers, even after taking them to court, could be a long and uncertain battle, especially when someone is already dealing with pain and suffering and financial losses. With minimum liability insurance now mandatory, one may hope that things will be better for car accident victims and their families.
