Delaware Car Insurance

Drivers in The First State should know

Driving in the First state can be a scenic experience. Peer into the Atlantic as you drive down the 25-mile stretch of Delaware’s Atlantic Coast with idyllic sandy beaches and stunning wetlands sitting on the coastline.

Perhaps, you’d rather take in the enthralling view of the lush, green hillsides outside of Hockessin and Wilmington. Or drive around Dover to have a close-up with the countryside.

Before you step into your car though, you’d want to be sure you have the right Delaware car insurance coverage that at least meets the minimum insurance requirements stipulated by Delaware law. The consequences of not adhering are steep.

And even though auto insurance premiums in the Diamond state are up to 40% above the national average, partly because of high auto repair costs; you can score a remarkable deal that offers you excellent protection.

But what types of insurance coverage do you need? What are the bespoke auto insurance rules and limits in Delaware? How can you get the most bang for your buck? Read on for answers to these and many more relevant questions about car insurance in Delaware.

What are the required, must-have Delaware car insurance coverage?

Minimum Auto Insurance Coverage Limits and Requirements in Delaware

The law that stipulates car insurance requirements in Delaware is the Delaware Motor Vehicle Safety Responsibility Law. It states that any vehicle used on public roads must have insurance coverage that falls into two categories:

  • Liability insurance (comprising bodily injury protection and property damage) and
  • Personal injury protection.

In 2017, the state updated legislation (last done 30 years back) regulating the minimum auto liability insurance limits for the mandated insurance coverage types.

  1. Bodily Injury Protection/Liability

If you cause an accident, which results in the injury or death of a person, the bodily injury liability offsets associated costs.

The individual may be an occupant of a vehicle involved in the accident or a pedestrian. And the costs this liability covers would range from medical to legal costs (defense if you’re sued).

Delaware insists you have a minimum bodily injury coverage shortened as ‘25/50’ to mean:

  • up to $25,000 per person per accident (in a single accident)
  • up to $50,000 to all persons per accident: maximum of $25,000 to any one person
  1. Property Damage Liability

Like the BI liability, this coverage kicks in when you’re at fault for the accident. PD pays for damages to property that isn’t yours. That’d range from damage to a parked car to a light pole.

The minimum property damage limit in Delaware is

  • up to $10,000 per accident
  1. Personal Injury Protection

As much as you need liability coverage for injury or death of someone else involved in the accident, you need one for yourself.

Also known as “no-fault car insurance,” PIP specifically covers associated accident costs—including medical expenses and loss of wages— for you and your passengers (say friends or family), regardless of who’s at fault for the accident.

Personal injury protection minimum limits in Delaware are:

  • up to $15,000 per person per accident
  • up to $30,000 to all persons per accident: maximum of $15,000 to any one person
  • up to $5,000 for funeral expenses

Delaware is an add-on state

We’ve established that getting a PIP is mandatory. Nonetheless, your right to sue is not limited.

For instance, if after an accident you’re unable to resume work for a month because you have to recuperate, you could have your PIP insurance cover lost income (in addition to medical expenses of course) that’s not covered by your health insurance policy.

You should note though that this is subject to the specific auto insurance contract.

Additional Information

The Delaware minimum auto liability limits is shortened as 25/50/10; to mean $25,000 for bodily injury per person, $50,000 for bodily insurance per incident, and $10,000 for property damage liability. The liability insurance kicks in even if you aren’t behind the wheel, but a family member or individual you gave permission to is driving your vehicle.

That said, it is good practice to get a policy that exceeds these limits. An automobile accident may occur to the average person approximately once every 18 years, but the average cost of a disabling, nonfatal accident is $90,000.

In the event that the cost of an accident you’re involved in is exactly that amount and you only had a policy that met the bare minimum only, you’d have to pony up the difference from your pocket. That’s $90,000 minus $25,000 (max per person per accident), leaving a hefty bill of $65,000—higher than the annual median household income in Delaware.

Thankfully, you can increase the claim amount of your policy significantly by slightly raising your monthly premium by a few dollars. The marginal increase is worth the peace of mind alone.

What are other types of insurance coverage to consider?

Optional Car Insurance Coverages in Delaware

The Diamond state makes it clear you can’t drive without liability and PIP auto insurance. However, these are the bare essential coverage and you may want to consider other types of coverage for a more holistic protection.

Adding optional insurance coverage may ratchet up your Delaware auto insurance premium, but government bodies and consumer advocates recommend some to limit your financial exposure to liabilities that aren’t within the purview of basic insurance coverage.

In certain instances, some coverages may not be optional—lenders may require you to get additional coverages as part of your car’s lease or finance agreement.

  1. Collision coverage

It pays for financial losses relating to physical damage your car incurs after an accident (colliding with another object—could be a utility pole or a tree).

Collision coverage is primarily based on the value of your vehicle and isn’t cheap.

Important tips

  • Collision insurance policies typically only cover financial losses and would not require replacing your car. It may also not cover the balance of your auto loan.
  • However, if you’re driving an older car, it is realistic for repair costs to exceed the value of your car. In which case you insurer would reimburse you for the value of your car rather than pay for repairs.
  • In extreme scenarios, you may find that you’d pay more than your car’s worth in premiums. Consequently, if the worth of your vehicle is less than $2,000, collision coverage is most likely not for you.
  • Lenders and lessees would typically require you to get collision coverage at least until you’ve paid for your car in full.
  1. Comprehensive coverage

Crashes may be the first thing that pops up in your head when auto insurance is discussed, but damage to your car could result from any number of causes, such as vandalism, fire, flood, severe weather, rockslides, theft, and more.

In a nutshell, comprehensive auto insurance will pay for costs not covered by collision insurance. Say a deer damaged a part of your car. Or a branch of a tree broke your rear window.

Comprehensive coverage primarily pays for vehicle repair, but it may also go towards replace your car entirely in case of total loss (theft for example). It’d however not cover collisions, medical or legal expenses, or stolen/damaged property inside the car.

Important tips

Factor in the 2016 vehicle theft rate of 125.1 per 100,000 residents (Dover is the Delaware car theft capital) as well as the risks of natural hazards; and a comprehensive coverage may fit more in the important column than optional column.

  • Unlike the liability and personal injury protection coverages, cost of comprehensive auto insurance depends on the deductible you select and the actual cash value (ACV) of your car.

Your car’s ACV will determine the maximum amount your insurance provider would be willing to pay. Repair costs that exceed the ACV usually results in the car insurance firm paying the ACV to help you replace the car. However, you may opt to keep the totaled car (retain salvage)

  • Lenders and lessees often make it mandatory to buy comprehensive insurance at least until the car has being paid off.
  1. Uninsured and under-insured motorist bodily injury coverage

Uninsured motorist coverage helps cover losses incurred from an accident caused by a driver without auto insurance or a hit-and-run driver.

Underinsured motorist bodily injury coverage helps settle costs incurred from an accident caused by a driver who does not have enough insurance to cover your loss.

Important tips

  • An estimated 11.5% of drivers in Delaware drive uninsured.
  • While both coverage types will pay towards costs of injuries to you and your passengers, only uninsured motorist coverage covers property damage. Under-insured motorist bodily injury (UMBI) coverage does not pay for damage to your vehicle.
  • An automatic $250 deductible applies for property damage on all uninsured motorist policies in Delaware, regardless of the deductible you may have on other coverage types.
  • Before you can make a claim under an uninsured motorist policy, you must first make a police report about the accident.
  • The Delaware Motorists Protection Act requires licensed auto insurance firms to offer uninsured and under-insured motorist bodily injury coverages to every individual purchasing auto insurance.

The minimum limit for both coverages is 15/30, which can be increased to up to 100/300. Minimum limit for property damage under uninsured motorist policies is $10,000.

  1. Towing and labor coverage

It pays for towing costs. Premiums for towing and labor coverage are very inexpensive. However, you may not need this coverage if you are a member of an auto club as the service is bundled in.

  1. Rental reimbursement coverage

To cover the cost of renting a car after an accident.

What can I do if insurers turn me down?

The Delaware Automobile Insurance Plan

Insurers are at liberty to turn down drivers deemed as high risk for a couple of reasons. It may be poor driving record (multiple crashes or violations), poor credit, et cetera.

Individuals who are unable to buy auto insurance on the open (voluntary) market after trying with at least two auto insurance firms can seek coverage through the Delaware Automobile Insurance Plan (DAIP).

The DAIP is an assigned risk program. All Delaware car insurance companies are part of the program and equally share the risks of insuring high-risk drivers. You can apply for DAIP coverage through any automobile insurer in Delaware.

What factors influence car insurance rates?

Factors That Determine Auto Insurance Rate in Delaware

  • Age, gender, marital status, and residence

Insurers need certain information about you for a more accurate risk assessment. Using your age, gender, and marital status may seem too personal to use, but that information is critical to ascertain if you belong to a demography that’s more likely to have accidents, which implies more claims.

For instance, single young adult men are likely to have more claims. Oldest drivers are also a high-risk demography.

Where you reside and zip code where your car is parked or garaged is also crucial. Usually, there are more claims in urban areas than in rural areas. If you’d want comprehensive coverage, then it’d matter if animal (deer, elk, moose…) collisions are known to occur in the area you live in.

Furthermore, crime like theft and vandalism is typically up in densely populated areas. As a rule of thumb, the higher the risk, the higher your premium.

  • Driving record and claims history. What’s your driving history like? Have you had any violations, accidents, or claims in the past?
  • Coverage. If you’d want a higher limit for better protection, your insurance rate will be higher. The opposite is true for deductibles, high deductible implies lower insurance rate.
  • Car type.

What’s the make (brand), model, and model year of your car? If you are getting insurance for a luxury car, you should expect higher premiums because the cost of repair is high.

Insurers also note the claim record of a car model. Getting comprehensive insurance, then you might be surprised to receive a quote for your standard, popular car that’s not as low as you’d have hoped. This is because they’re more likely to be stolen.

Below is a table of Delaware’s top 10 most stolen cars in 2017:

Car Make and Model

Model Year Most Frequently Stolen

Honda Civic

2000

Honda Accord

2005

Chevrolet Malibu

2012

Ford Pickup (Full Size)

2016

Hyundai Sonata

2013

Chevrolet Impala

2007

Chevrolet Pickup (Full Size)

2011

Hyundai Elantra

2016

Toyota Camry

2011

Nissan Altima

2003

  • Car usage. How often do you use your car? If you’re clocking more miles, risk is higher, and you should expect your premium to be on the same wavelength (inching higher).
  • Credit score and history

Automotive insurance companies also use your credit score and history during risk assessment.

However, Delaware laws—Insurance Consumer Fairness Legislation—limit the use of a driver’s credit history for only new policyholders—when you first obtain coverage from a company. Put simply, a car insurance company can only consider your credit score when you’re applying for a new policy.

If you’re a renewing policyholder, the company cannot use your credit history to increase your rates. In any case, you may ask your insurer to review your credit when renewing if your credit score/history has improved with the possibility of receiving a lower rate. In fact, the law mandates that a driver “may be re-rated at renewal based upon a current credit score upon the request of the insured (driver), but only to the extent that it benefits the consumer (driver).”

How can I get discounts or lower my car insurance rate?

Tips to Lower Your Auto Insurance Premium in Delaware: Delaware Auto Insurance Discounts

  • Maintain a good driving record that indicates safe and violation-free driving.
  • Complete a defensive driving course. Get the list of approved defensive driving courses on the Delaware’s DMV website.

You can receive a 10% discount on a portion off your auto insurance for three years if all drivers of a vehicle (all persons who’d use your car) take an approved course.

You can receive a 15% discount if you take a refresher course within 180 days of the end of the three-year period.

  • Call us for a quote on the cost of insurance for a specific car before buying it.

For example, while Honda Accords and Civics are amongst the most stolen car models in the country (same in Delaware); older production models that do not have smart keys and other anti-theft technology are most at risk. Following the introduction of smart keys and other anti-theft technology, Honda thefts have reduced considerably.

  • Get the highest deductible you can afford on comprehensive and collision coverages. Afford is the key word. In general, higher deductible will mean lower premiums, but you can’t opt for a deductible that will be difficult for you to pay at a moment’s notice.
  • Occasionally review your policy and update coverage accordingly. For instance, you may find that it doesn’t make much financial sense to have collision and comprehensive insurance after your car has aged and declined in value.
  • Inquire about discounts offered for:
    1. Multiple cars on a policy
    2. Good student
    3. Mature driver
    4. Airbags, anti-theft devices, and other equipment
    5. Accident-free record
    6. Other insurance with the same firm

What are the risks of driving uninsured in Delaware?

Driving without auto insurance in Delaware: Costs and Penalties

Although a small percentage of drivers in Delaware drive without auto insurance, it is against state law and so carries steep penalties and costs. Breaking state law is bad enough.

However, driving an uninsured vehicle cost other drivers money in higher insurance premiums and the financial hit you’d take if you get in a car accident (without car insurance) will likely dwarf the state-sanctioned fines and penalties.

Random stops

To ensure total compliance, state law empowers Delaware law enforcement officers to request drivers to show valid proof of insurance on the vehicle regardless of reason for the stop. Put in another way, you will have to show proof of insurance whenever a law enforcement officer asks you to pull over.

As of June 2014, you will be able to show proof of auto insurance (insurance ID card) in either physical or electronic format (proof of insurance on a ‘cellular phone or any type of portable electronic device’), thanks to House Bill 258. Nonetheless, we recommend you keep a current physical copy of your insurance ID card in your car at all times.

Random audits

In addition to random stops, the Diamond state engages in random audits to ensure that registered vehicles remain insured (continuous coverage). It is not enough to get car insurance, you should not let your auto insurance policy lapse while your registration is active.

The First State’s Division of Motor Vehicles randomly audits at least 10% of all registered vehicles annually. If you’re randomly selected, you’d receive a request to show your proof of insurance.

To comply, immediately contact your auto insurance provider and ask them to submit a Delaware Insurance Certification (also called Form FR-19). You can only submit this form through your insurance company.

What should I do when my insurance lapse?

If your vehicle still has an active registration, send your license plate to the Division of Motor Vehicles prior to canceling your car insurance (or it lapses). You will get back the tags at no charge, if you provide proper insurance and your registrations hasn’t expired.

Penalties

  • Not less than $1,500 fine for the first offence
  • Not less than $3,000 fine for each subsequent offense that occurs within 3 years
  • In addition, diving license and/or privileges will be suspended for 6 months

FAQs

Is Delaware a no-fault state?

The First state operates a “fault” auto insurance system where the individual (or more accurately, the individual’s insurance carrier) at fault for causing a car accident is responsible for compensating anyone who sustained injuries, vehicle damage, and/or other accident-related losses.

If you suffer any kind of injury or damage stemming from an auto accident (that’s not caused by you) in Delaware, you may take either of three routes:

  • File a claim with your insurer, assuming you have relevant coverage for the loss. Usually in this scenario, your insurance carrier will in turn purse a subrogation claim against the insurance company of the at-fault driver.
  • File a third-party claim directly with the insurance company of the at-fault driver
  • File a personal injury lawsuit in civil court with the at-fault driver as the defendant

In summary, Delaware is not a no-fault state.

Who do I contact in government when I have an insurance complaint?

The Delaware Department of Insurance. Contact the Consumer Services division by phone, fax, letter, email, or an online complaint form. Here are the contact details:

Phone: 1-800-282-8611 (Toll-free in Delaware) or (302) 674-7300

Fax: 302-739-6278

Email: [email protected]

Address for mail: 841 Silver Lake Blvd. Dover, DE 19904

File an online complaint

What insurance practices does the Delaware Automobile Insurance Reform Legislation prohibit?

Passed and signed into law as the Insurance Consumer Fairness Bill (House Substitute1 (HS 1) for House Bill 80), the legislation restricts the factors auto insurers may use in underwriting consumers’ policies. Here’s a rundown of the changes:

  1. Insurance companies may not use an insurance credit score that uses income, gender, sexual orientation, gender identity, education, address, zip code, race, ethnic group, religion, marital status or nationality of the consumer as a factor.
  2. Insurance companies may not cancel or non-renew a policy based on credit information alone.
  3. Insurance companies may not take action against a consumer because that person lacks a credit card or lacks credit information.
  4. Insurance companies cannot utilize collection information using medical codes.
  5. Insurance companies cannot utilize extraordinary life circumstances such as serious illness or injury, death of a spouse or loved one, divorce, and involuntary loss of employment for three (3) months or more.
  6. HS 1 for HB 80 continues Delaware’s prohibition on using credit in policy renewals, unless a review request results in lower premiums.
  7. An insurer cannot increase a renewal rate for personal automobile insurance policies based solely on an insured attaining the age of 75 or older.
  8. An insurer cannot increase rates based upon a change of marital status due to the death of a spouse.

Would comprehensive auto insurance cover personal items stolen from a car?

No. You’d need a homeowners or renters insurance policy for that. Thus, if your car was stolen with personal items inside, you’d need to file two different claims—through your comprehensive auto insurance for the car theft and through your homeowners insurance for theft of personal belongings.

Comprehensive insurance only covers components and features that are permanent, pre-installed parts of the car.

Why are Delaware insurance rates higher than the national average?

  • High population density
  • High auto repair costs—eighth most expensive in the US in 2016
  • A small, but significant percentage of uninsured drivers