What Virginia’s New, Higher Car Insurance Requirements Mean for Drivers | Insurify

Liability auto insurance protects a driver financially if they cause an accident. The coverage pays for the property damage and injuries you cause when you’re at fault in a crash — up to your policy’s limits. Every state but New Hampshire requires drivers to carry a minimum amount of liability car insurance.

Virginia likely increased its requirements because “prior limits may [have been] insufficient to cover accidents based on average claims cost data,” Mark Friedlander, director of corporate communications at the Insurance Information Institute (Triple-I), told Insurify.

“As vehicle repair and medical costs increase, minimum car insurance limits offer less coverage than ever before, causing more financial risk to policyholders,” Friedlander said. “Additionally, as we see more litigated auto accident claims, the new limits will provide a greater level of financial protection to policyholders who may face legal action following an at-fault accident.”

Virginia’s new limits take effect in January and will impact new and renewing policies.

Higher limits and the effect on auto policyholders

Virginia’s higher limits will add more liability protection to standard policies. Here are the changes to the state’s auto liability insurance requirements.

Chase Gardner, data insights manager at Insurify, said the increase will likely affect rates in Virginia.

“Raising minimum liability limits should cause rates to go up by a few percentage points for drivers with state-minimum coverage, though the effect should hopefully be smaller than recent price hikes,” he said.

Virginia’s current average auto insurance premium is below the national average, according to Insurify’s auto insurance report. Drivers in the Old Dominion pay an average of $182 per month for a full-coverage policy and $100 per month for a liability-only policy, according to Insurify data.

The national monthly averages are $204 for full coverage and $104 for liability-only coverage.

“The liability portion of a full-coverage policy typically makes up about half the cost of the overall policy, but the coverage limits themselves are not the only part of this,” Gardner said. “Factors like accident rates, crime rates, and inflation in the vehicle repair market all contribute to how much you pay for car insurance, too, and they’ve been the primary drivers behind nationwide rate increases over the past couple of years.”

What’s next?

Insurify analysis predicted a 22% nationwide average increase in auto insurance costs in 2024. Costs had already spiked 15% by the year’s midpoint, according to Insurify’s auto insurance report.

Car insurance costs in Virginia are rising a little faster than nationwide, and Insurify analysts predict a 27% total increase there in 2024.

As the higher limits begin to affect premiums, drivers of all income levels could start feeling the financial pressure, leading consumers to search for better rates and coverage options.

Triple-I recommends those seeking lower insurance costs shop around and compare quotes, bundle insurance policies, and take advantage of discounts.

Policyholders can also speak to their insurance agents about the best ways to cut costs from their existing policies.

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