Car Insurance in Vermont

I found $350 in savings in less than a half-hour

Vermont residents luck out with some of the most affordable auto insurance in the nation. We’ve got some of the lowest rates of uninsured drivers and a pretty spread-out population, which makes us less risky in the eyes of the insurance companies. The typical monthly premium in Vermont is almost 40 percent below the national average — that’s already a savings of nearly $650 per year. According to my research, most drivers are still probably paying more than they have to for coverage.

According to the Consumer’s Guide to Auto Insurance from the Vermont Department of Financial Regulation, a state survey of the auto insurance market found that rates charged by different companies varied by as much as 50 percent, and that “a majority of consumers don’t shop around when buying or renewing an auto insurance policy.” Now that I have done some shopping around, it’s almost mind-boggling to pay more for exactly the same thing, when it’s not all that hard to grab a few quotes and take advantage of the competitive market.

I got quotes for the state’s minimum coverage and found I could save more than $350 a year simply by choosing Allstate. I wish I could say it was the cheapest for everyone and that we could end the search here, but unfortunately, that’s not the case — just because Allstate was the best car insurance option for me doesn’t mean it will be for you too.

Insurance providers have their own formulas for calculating rates, taking things like your driving history, address, and vehicle make and model into account. They even care if you’re married or not. Every company weighs these factors a little differently, so you have to get quotes from several of them to find out which formula is best for you. I recommend getting at least five quotes, and more if you can stand it.

Online quotes are easy. It only takes about five minutes and most, if not all, of the required data is information you’ll already know. If you don’t know your VIN or the average number of miles you drive each year, you should look that up before you begin. Otherwise, you’re probably all set. Some companies require you to call them for a quote. In those cases, expect to add another 10 minutes to the process.

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Our Top 5 Picks for the Best Car Insurance in Vermont

I began my search with these five companies, all of which are licensed to do business in Vermont and have stellar customer satisfaction and financial ratings.

Insurer My quote
Allstate $268
GEICO $294
State Farm $496
Amica $521
Liberty Mutual $619

I chose them based on their reputation for financial strength and strong customer service; they all have “excellent” or “superior” grades from A.M. Best, a top financial strength rating agency, and the highest J.D. Power customer satisfaction ratings in New England. Statistically, you’re going to be in an accident at least once in your life (and if you live until you’re 85, it’s more likely you’ll be in four or five accidents). That’s stressful enough without adding unhelpful agents or financial insolvency into the mix, so you want to make sure you choose your insurer wisely. A cheap company that’s not there for you when you need them, simply isn’t worth the savings in my opinion.

The Vermont Department of Financial Regulation’s Consumer’s Guide to Auto Insurance agrees, “Cost is never the only factor in choosing a policy. Quality and convenience of service make a difference, as well as the reputations of companies and agents. Not all insurers offer the same coverage options. You want to find the best combination of service, reliability and price.”

Allstate was the cheapest company for me and GEICO came in close behind. But given the choice between the two, I’d absolutely choose Allstate. It required me to purchase liability coverage that was double the state minimum and its policy still came out the cheapest. There’s no way I could justify paying the extra $26 GEICO wanted for half the coverage — let alone the extra $351 Liberty Mutual wanted.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

Insurance premiums are supposed to be based on risk, but in the past few years, insurers have begun weighing your likelihood of switching providers as well. They determine this by looking at your credit score, how long you’ve been with your current provider, and even your online shopping habits. You would think staying loyal would earn you a discount, but thanks to price optimization, it may actually cost you.

That’s why it’s best to shop around for new coverage every year or two. Doing this shows insurers you can’t be trusted to stay with them out of loyalty alone and it’ll cause them to offer you a more competitive rate. Not shopping around can make insurers think you’re complacent and they’ll sneak in extra charges to capitalize on that.

Vermont is one of more than 15 states that has either banned or place some sort of regulation on price optimization. As of June 2015, any insurance provider operating in Vermont may not raise rates based on consumer shopping habits, as this is in conflict with state law. That’s good news.

Even still, I recommend shopping around. If you’re a safe driver, your risk is likely to decrease year over year. Based on risk alone, you’re likely to find that every year you’re a little bit less expensive to insure.

Vermont’s Minimum Coverage

The Bare Minimum

Vermont mandates drivers carry both liability and uninsured/underinsured motorist coverage. The required liability coverage includes $25,000 of bodily injury coverage per person and $50,000 per accident, plus $10,000 of property damage coverage. Uninsured and underinsured motorist coverage have higher minimums with $50,000 of bodily injury coverage per person and $100,000 per accident, along with $10,000 for property damages.

The Best Car Insurance Isn’t Just Cheap Car Insurance

Yes, I know that means higher premiums, but consider this:

  • On average, a driver files a claim for an accident once every 17.9 years. I’ve already been an accident before, but I know that doesn’t mean I’m safe for the next 18 years.
  • The average cause of an accident that permanently disables someone is $80,700. And that’s before you figure in property damages for wrecking their vehicle.

Say I only have the minimum liability coverage ($25,000/$50,000/$10,000) and I get into an accident that causes someone a serious injury, not to mention totaling their car. My insurance would have my back up until I hit that $25,000 cap and then I would be on my own. And I don’t have $55,000 lying around to cover the rest. That means I’m likely to end up on the wrong end of a lawsuit and that’s a place I’d rather not be.

Now consider the cost of upgrading coverage. My bare-minimum policy from GEICO only cost $294 a year. Doubling those limits only brings the total to $318. That’s only an extra $24 a year and it means that, in the event of that horrific accident, I’ll only have $30,000 to pay out of pocket. That’s still less than ideal, but it’s better than the first option.

You may also want to think about adding some protection for your vehicle. Collision coverage pays for repairs to your vehicle following an accident. If you have a lease or loan, you may be required to purchase this, as well as comprehensive coverage, which pays for damages to your vehicle resulting from something other than a collision with another vehicle, like fire or vandalism. My car isn’t anything spectacular, and I don’t really care if it gets beat up, so it’s not worth the extra cost to me, but your situation might be much different than mine.

If You Skip Coverage, It’ll Cost You

Driving without insurance in Vermont could earn you a fine and points on your driving record. Additionally, you must obtain a certificate (also known as an SR-22) proving you have financial responsibility insurance, which is a type of liability insurance that covers you, no matter which car you’re driving, rather than your vehicle. (Fair warning: that’s not anywhere near cheap insurance.) You must maintain this insurance for a minimum of three years and failure to do so will result in the suspension of your license. The paperwork burden for financial responsibility insurance is pretty steep too: the Vermont DMV has what they themselves call “very specific requirements” for keeping a record of this type of insurance on file, and they won’t accept anything other than a certificate from an insurance company (not an insurance agent). We all already know this, but it’s worth saying: there’s no way that going without insurance makes any sense at all.

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Beat the Average Premium: 9 Ways to Snag Cheap Car Insurance Rates

There are a lot of factors that affect your rates, but there are just as many ways for you to drive them down. Getting a bunch of quotes already puts you ahead of most people. I only drive my car four days a week and that helps cut back on my annual mileage and usually earns me some discounts. Take a look at The Simple Dollar’s list below for more ideas on how you can turn your already cheap car insurance that much better.

Nine Ways to Lower Your Car Insurance

FAQs

Why are Vermont’s rates so cheap?

What to Expect
Average Monthly Premiums
United States $139
Vermont $85

Vermont’s auto insurance premiums are some of the cheapest in the nation, thanks in large part to the state’s rural setting. A low population density means a smaller chance of accidents, and that’s good for you and the insurance company. Vermont also sees the fewest vehicle thefts of any state nationwide. Factor in the low percentage of uninsured drivers and it’s easy to see why insurers offer Vermont residents rates nearly 40 percent below the national average.

I was in an accident and the other driver’s insurance company says I’m 50 percent at fault? Can they do that?

Yes, they can. And, it means that they’re only going to pay for 50 percent of the loss. In Vermont there’s a doctrine of comparative negligence — if you’re found to be partially at fault, the other driver’s insurance company can limit the amount they’re going to cover. That’s another reason to consider carrying collision insurance — if you’re responsible for some, you’d have coverage for yourself, too, not just the other driver.

What should I do if I’m having a hard time getting coverage?

Every driver is guaranteed certain coverages through the Vermont Automobile Insurance Plan, also known as the assigned risk plan. If you’re having a hard time finding coverage, ask about this plan in particular; any insurance agent will be able to tell you more about it.

How can I know if my credit score is going to affect my rates?

The Fair reporting Credit Act requires insurers are required to notify consumers if they experience any kind of adverse action, such as a denial of coverage, premium increase, or cancellation of coverage due to the information in their credit report. You can expect your insurer to give you a description of the parts of your credit history that are adversely impacting your insurance rates — typically based on something called an insurance score, which is a combination of your credit score and other factors like age, zip code, and driving record. They’re also legally required to give you the name of the national credit bureau that supplied the information. If that ever happens, you should get your free copy of that credit report and correct any errors you may find. (Of course, you should monitor your credit score annually, and regularly address any errors.)

The Bottom Line

Vermont residents already get a pretty sweet deal on auto insurance, but you can save yourself even more by shopping around. I was able to find $350 in savings, and you might be able to find even more — you’ll never know until you actually hit the dirt and get some quotes.

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