Bill proposes requiring all Virginia motorists to have insurance

Virginia drivers may soon be required to have car insurance to drive in the commonwealth after bipartisan support sent legislation to the governor for approval.

Senate Bill 951, which Republican Sen. Frank Ruff of Mecklenburg is carrying, would repeal an option in state law for drivers to register an uninsured motor vehicle by paying a $500 fee. The registration does not provide vehicle insurance to drivers.

According to AAA, Virginia and New Hampshire are the only two states in the U.S. not to require car insurance.

Macaulay Porter, a spokeswoman for Gov. Glenn Youngkin, said the governor will review the legislation.

“Most uninsured drivers have limited assets to either pay for their repairs at the time of the accident or assets for others to attach,” said Ruff in an email to the Mercury. “Therefore, they are partially doing the repairs or junking the vehicle.”

Under the legislation, all uninsured vehicle registrations would expire before July 1, 2024.

Insured motorists generally have to pay for their own damages if hit by an uninsured driver. Ruff said he hopes the focus on the issue will help drivers understand the need for insurance.

The law allowing vehicle owners to register an uninsured motor vehicle and still comply with Virginia’s insurance laws was enacted in 1958, according to Jessica Cowardin, a spokeswoman with the Department of Motor Vehicles. The fee was originally set at $15.

Fees are deposited into the Uninsured Motorist Fund, which aims to reduce the cost of insurance coverage for accidents involving uninsured motorists.

The fund also receives revenues from penalties and fees for noncompliance with Virginia’s financial responsibility laws.

Today, approximately 5,000 of Virginia’s 7.5 million registered vehicles are uninsured, according to the fiscal year 2022 data collected by the DMV. Of the $5.3 million transferred by DMV to the fund that year, approximately $650,000 was from the uninsured motor vehicle fee.

In January 1995, the DMV convened a task force to study issues related to liability insurance. The group recommended that Virginia continue to offer motorists the option to pay an uninsured motorist fee rather than requiring mandatory insurance.

“Compulsory insurance appears at first glance to be the right answer,” says a 1996 report on the task force. However, it concluded, “compulsory insurance is not the solution to the problem of uninsured motorists. Instead of reducing the number of uninsured motorists, compulsory insurance requirements have prompted citizens who are trying to circumvent the state’s insurance requirements to acquire short-term policies that are canceled as soon as the vehicle is registered or obtain a fraudulent insurance card that is shown at the time of registration.”

Ron Jenkins, executive director of the Virginia Loggers Association, said the group reached out to Ruff about addressing the issue of uninsured motorists after logging truck drivers began installing dash cameras to document “some of the crazy things we see on the highway these days” and protect themselves in a potential court case.

“We think it’s a good policy,” said Jenkins. “We think it’s a perfect time to change policy, and we hope the governor signs it.”

Matt Overturf, a regional vice president with the National Association of Mutual Insurance Companies, said it’s difficult to predict how drivers of uninsured vehicles might respond to the proposed elimination of the fee option.

“Some may continue to obey state laws and obtain coverage despite the likely higher costs, some may opt to continue driving but without coverage, and some may simply stop driving,” Overturf said. “But what remains certain is that having insurance coverage is a positive for both the driver and others on the road and a financial lifeline in the wake of an accident.”

Ruff admitted he had had no expectation of the legislation passing since the law allowing drivers to pay the fee had been in place for decades.

He said drivers would also illegally use a “farm use” placard to avoid insuring vehicles. Last year, lawmakers passed legislation that requires vehicle owners using the farm use exemption to obtain a nontransferable permanent farm use placard from the DMV for $15 and certify that the vehicle is insured.

Lawmakers last year also passed Ruff’s legislation to automatically fine drivers $600 every time a car was stopped if a driver could not show proof of insurance within a couple of weeks. He said a no-frills liability policy could often be purchased for less than the fine.