Virginia's new car insurance rules may lead to higher premiums

Virginia drivers are set to experience an increase in auto insurance premiums due to new state-mandated higher liability auto insurance requirements effective from 2025. The revised minimums will position Virginia among the top ten states with the highest liability insurance requirements.

Liability auto insurance provides financial protection for drivers at fault in accidents, covering property damage and injuries up to the policy's limits. While every state except New Hampshire mandates a minimum level of liability car insurance, Virginia's recent adjustment is likely due to prior limits being "insufficient to cover accidents based on average claims cost data," according to Mark Friedlander, director of corporate communications at the Insurance Information Institute (Triple-I).

"As vehicle repair and medical costs increase, minimum car insurance limits offer less coverage than ever before, causing more financial risk to policyholders," Friedlander noted. He added that increased litigation in auto accident claims necessitates these new limits for better financial protection.

The changes will impact both new and renewing policies starting January 2025. Chase Gardner, data insights manager at Insurify, suggested that this could lead to rate increases for Virginia drivers with state-minimum coverage but anticipated these hikes would be smaller than recent ones.

Currently, Virginia's average monthly premium for full-coverage policies stands below the national average at $182 compared to $204 nationwide. For liability-only policies, Virginians pay $100 monthly against a national average of $104.

Gardner emphasized that factors beyond coverage limits influence insurance costs: "Factors like accident rates, crime rates, and inflation in the vehicle repair market all contribute."

Insurify forecasts a 22% rise in nationwide auto insurance costs by 2024's end; however, Virginia might see a steeper increase of 27%. As premiums climb under the new requirements, consumers may seek better rates and coverage options. Triple-I advises exploring quotes from different insurers, bundling policies, leveraging discounts, and consulting agents on reducing existing policy costs.