Delaware Car Insurance Laws: Minimum Coverage, Penalties and SR-22

Every owner of a vehicle required to be registered in Delaware (other than a self-insurer) must carry: liability coverage of at least $25,000 for bodily injury or death of one person, $50,000 for two or more people in one accident, and $10,000 for property damage (25/50/10); personal injury protection (PIP) of at least $15,000 per person and $30,000 per accident for medical, funeral (up to $5,000), lost earnings and related expenses incurred within 2 years of the accident; and $10,000 of property damage coverage for property other than vehicles. Only policies from insurers authorized in Delaware count. Owners may elect PIP deductibles and other reductions in writing.

Delaware is an at-fault (tort) state that requires personal injury protection: every policy must include PIP benefits (at least $15,000 per person / $30,000 per accident) paid to injured occupants and pedestrians regardless of fault, and an injured person may not claim in a lawsuit against the at-fault driver the damages that PIP or the required property coverage pays for. PIP insurers can recover what they paid from the at-fault driver's liability insurer, and disputes between insurers go to arbitration.

Auto liability policies on Delaware vehicles must include uninsured (including hit-and-run) motorist coverage for bodily injury and property damage, in at least the state minimum liability amounts, unless a named insured rejects it in writing on the insurer's form; once rejected, it is not added at renewal unless the named insured requests it in writing. UM property damage is subject to a $250 deductible per accident unless the insured and insurer agree otherwise in writing, and includes loss of use. A vehicle counts as uninsured if it has no coverage at the required limits, its insurer denies coverage or becomes insolvent, or it is a hit-and-run vehicle that made physical contact with the insured or the insured vehicle (or a noncontact vehicle whose driver and owner are both unknown).

The insurance identification card must be in the driver's possession or in the vehicle whenever it is driven and be shown on request of a police officer or another party to an accident. If the insurer and insured agree, the card may be shown electronically on a phone or other device (doing so does not consent to a search, and an officer may ask that it be forwarded electronically). A driver who cannot produce the card gets a summons, but is not convicted if valid proof that coverage was in force is produced to the court before conviction. The DMV registers only insured vehicles, randomly audits at least 10% of registrations each year, and does not accept photocopies or printouts of cards at its offices (an insurer's mobile app card is accepted).

Driving or allowing a vehicle to be driven without required insurance carries a fine of $1,500 to $2,000 and a 6-month suspension of the driver's license for a first offense; a subsequent offense within 3 years carries $3,000 to $4,000 and a 6-month suspension. The court may suspend the minimum fine if the person gets insurance before sentencing, and driving privileges stay suspended until proof of insurance is filed with the DMV. When insurance lapses during the registration year, the DMV suspends the registration and assesses $100 for up to 30 days uninsured plus $5 per day after that (until insurance is replaced, plates are surrendered or the registration expires), plus a $50 reinstatement fee; the owner must surrender the registration card and plate within 5 days of a suspension notice, and police or the Insurance Fraud Bureau may confiscate plates. A hardship (occupational) license may be available in some cases.

Under Delaware's Financial Responsibility Law, a person whose license is suspended for an unpaid motor-vehicle accident judgment stays suspended until the judgment is satisfied (as the law provides) and the person gives proof of financial responsibility for the future. The DMV may also require certified evidence of insurance at hearings, after point accumulation, or when driving privileges are reinstated.

Insurers may cancel or refuse to renew a private passenger auto policy only for listed reasons, including nonpayment, material misrepresentation, violation of policy terms, failure to disclose accidents, violations or losses from the prior 36 months, a false or fraudulent claim, a household or regular driver's license suspension or revocation within 36 months (with exceptions for certain non-driving offenses), certain medical conditions without a physician's certificate, certain convictions within 36 months (DUI, vehicular homicide, leaving the scene, vehicle theft, and others), 3 or more violations totaling over 8 points or 3 at-fault accidents with claims over $250 within 36 months, or certain vehicle conditions or uses. Cancellation requires at least 30 days' notice with the reason (15 days for nonpayment); nonrenewal requires at least 30 days' notice with the reasons. Notices (other than for nonpayment) must mention possible eligibility for the assigned-risk plan and the right to appeal to the Insurance Commissioner. Household members cannot be canceled for another insured's fault; the at-fault driver is excluded instead.

Delaware allows credit-based insurance scores with limits (18 Del. C. ch. 83): an insurer may not use a score calculated using income, gender, sexual orientation, gender identity, education, address, ZIP code, race, ethnic group, religion, marital status or nationality; may not deny, cancel or nonrenew, or set renewal rates, solely on credit information; may not request credit information at renewal unless the consumer asks (and on request must rerate and pass along any improvement, no more than once a year); must treat a missing credit history neutrally or as otherwise approved; and may not count medical collections, consumer or insurance inquiries, clustered mortgage or auto-loan inquiries, or bankruptcies and judgments more than 5 years old against the consumer. Insurers also may not use a coverage lapse caused by military deployment, or certain lapses for youth in foster care, in setting a new policy's rate.

When an insurer pays a total loss settlement and the owner keeps the vehicle, the owner must obtain a salvage certificate from the DMV (in person or by mail). The vehicle cannot be driven until it is reconstructed, inspected by the Delaware State Police Auto Theft Unit, passes Delaware safety inspection, and is retitled.

For a sale between Delaware residents, the seller completes the title assignment (buyer's name and address, sale date, price and odometer disclosure) and signs it, and sends the Seller's Report of Sale to the DMV; the buyer completes the Purchaser's Application on the back of the title and signs. Titles do not need to be notarized. The buyer must show proof of liability insurance and a Delaware driver's license (or two proofs of residency). The vehicle may not be driven until a new title is issued in the buyer's name, and transferring more than 30 days after purchase brings a late fee. Fees include a title fee and a 5.25% document fee based on the sale price or the NADA average trade-in value, whichever is higher, plus registration.

New residents must apply for a Delaware driver's license within 60 days after taking up residence (in person, surrendering the out-of-state license; Class D license fee $50, valid 8 years), and must title and register their vehicles within 60 days after becoming residents. Vehicles with an out-of-state title must go through a DMV inspection lane, where all vehicles get a safety inspection and, depending on model year and weight, a full inspection (including emissions testing) or a VIN verification. Military members and dependents need not get a Delaware license or registration until 60 days after separation from service.

First contact the insurer, agent or adjuster. If not resolved, file a complaint with the Delaware Department of Insurance's Consumer Services Division using its online complaint form (https://sbs.naic.org/solar-web/pages/public/onlineComplaintForm/onlineComplaintForm.jsf?state=DE), or call 1-800-282-8611 (in Delaware) or (302) 674-7310, or email consumer@delaware.gov; requests may also be submitted by fax, mail or phone. A policyholder who receives a cancellation or nonrenewal notice for any reason other than nonpayment can appeal to the Department using the Application for Appeal of Automobile Cancellation or Non-Renewal (18 Del. C. § 3906).