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For decades, Virginia and New Hampshire have been the only two states that allow drivers to skip buying car insurance. But that’s changing in Virginia.
Effective July 1, 2024, every driver in the commonwealth who wants to register a vehicle or renew a registration will have to purchase at least the state’s minimum amount of liability insurance. And the penalties for driving uninsured in Virginia are significant.
That said, the rule change isn’t likely to affect many Virginia drivers — most already buy car insurance.
Virginia’s uninsured motorist fee
Most states require drivers to have at least a minimum level of car insurance before they can register a vehicle. But in Virginia, drivers could register their vehicles and forgo buying car insurance by paying an annual $500 uninsured motor vehicle fee.
Revenue from the fees goes into Virginia’s Uninsured Motorist Fund, which is intended to help insurance companies cover uninsured motorist claims.
Uninsured motor vehicle fees contributed $650,000 to the fund in 2022, according to the Virginia Department of Planning and Budget. At $500 per driver, that $650,000 accounts for 1,300 Virginians who registered uninsured vehicles in 2022.
By comparison, U.S. Census data shows that the commonwealth has a population of more than 8.6 million, 79% of whom are older than 18 — and likely are licensed drivers. And drivers who registered uninsured vehicles aren’t the only ones driving without insurance — nearly 11% of Virginia drivers don’t have car insurance, according to a 2021 study by the Insurance Research Council.
What’s changed?
Virginia’s “General Assembly has eliminated the uninsured motor vehicle fee effective July 1, 2024,” says Jillian Cowherd, spokesperson for the Virginia Department of Motor Vehicles. “Anyone who previously paid the UMV fee must now obtain vehicle insurance that meets or exceeds Virginia’s liability insurance requirements.”
Virginia drivers won’t be able to register a vehicle without at least the commonwealth’s minimum-required amount of liability coverage.
Why it was changed
SB 951, the bill that repeals the uninsured motor vehicle fee, passed the commonwealth’s legislature in February 2023. Sponsored by Republican Sen. Frank Ruff, the bill passed with bipartisan support, the Virginia Mercury reported.
“You and I both pay for uninsured drivers,” Ruff told the Richmond Times-Dispatch. “Hopefully, this will slow down any rise and maybe even push premiums down.”
Penalties for driving uninsured in Virginia
Uninsured drivers who cause accidents are usually entirely responsible for the property damage and medical costs of the injured driver and passengers. Most states also apply penalties for uninsured driving.
In Virginia, the DMV can suspend drivers’ licenses and vehicle registrations, fine them $600, and require them to file a Financial Responsibility Certificate (SR-22) with the DMV for three years. They may also have to pay a reinstatement fee.
What drivers should do by July 1, 2024
Drivers who previously registered uninsured motor vehicles will need to buy a liability policy — meeting the state’s minimum requirements — from an insurance company licensed to operate in Virginia, Cowherd says.
“They’ll need to renew the registration on the vehicle with the updated insurance information prior to July 1, 2024,” she says. The DMV will verify the insurance information with the insurance company.
“Drivers should be prepared to show proof of insurance in the future, if requested by the Virginia Department of Motor Vehicles.”
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