How Is Car Insurance Impacted when Moving out of State?

When motorists permanently move to a new state, they need new auto insurance policies to comply with the minimum requirements and rules of the new state they moved in. Even if their current insurer is operating in the new jurisdiction as well and they want to stay with the same company, the carrier has to cancel the old policy and issue a new policy, which is compliant with the new state requirements.

Although auto insurers and states give motorists enough time to switch their policies it is best to make the switch as soon as your move is complete. States and companies allow 30 – 90 days for policyholders to change their insurance policies. Perhaps, the first thing to do is to check how long grace period you have because it is fairly short in some states. There are usually fines for failing to switch policies within the given time.

Also, people need to change their driver’s licenses and vehicle registration documents and get new license plates from the new state in a similar time frame and they will often need proof of compliant insurance to register a vehicle.

Most large vehicle insurance companies operate in nearly every state and they can do the switch for their customers by cancelling the policy from the previous state and issuing a new policy complying with the new state requirements. Then, they can let the policyholder know the premium differences.

But agents are licensed in the state they operate and usually aren’t licensed anywhere else. So, people will most likely have to change their agent. They may be able to get a recommendation for a good agent from their previous contacts.

However, carriers aren’t equally competitive in every state and there may be very competitive and reputable small companies in your new state. That is why it is always best to take your time, get a few quotes and find the best deal for your new zip code. If your current auto insurance is expiring shortly anyway, you may want to start fresh with a new carrier as well.

One thing to keep in mind is that car insurance rates can be substantially different even between two neighboring states like New York and Connecticut. If they moved from New York to Connecticut motorists may be pleasantly surprised and sign up with the first company they get a quote from because it would appear to be very cheap. However, average car insurance prices in Connecticut are half of New York. So, be aware of the average costs in your new location and shop around accordingly.

Moving out of state offers a good chance to update your details and shop around to find the best deal again. Premiums are significantly affected by the demographic factors in each zip code and many other factors and regulations influence the prices between states. Also, people may have moved into their first home or changed their cars. All these changes must be taken into account even if you don’t want to change the insurer at this moment.

Most reputable companies don’t charge a cancellation fee or charge a minimal amount when people cancel their policies because they are moving out of state. Also, policyholders get back unused portions of the premiums they paid.

Vehicle insurance requirements can be considerably different between two jurisdictions, especially when you move from a fault to no-fault state. For example, no-fault states require every policyholder to have their own Personal Injury Protection in addition to Liability coverage against third party claims. Furthermore, some may impose additional conditions on bad drivers like SR-22 requirements. Several other things can be different although it may appear to be similar at the outset. For example, some authorities require Uninsured Motorist coverage as a minimum while it is optional in others. So, motorists should familiarize themselves with their new policy coverage.

Some companies may require proof of address when people move to a new state because the new address doesn’t show in people’s credit reports and therefore car insurers cannot verify it. In such cases, people can send a pay stub, utility bill or a lease contract to prove their zip codes. Companies usually can start the policy and ask for the proof of address to be sent in a certain amount of time. The reason for this practice is to prevent insurance fraud and make sure the carrier collects the correct premium.

Even if you aren’t fully settled in your new home and currently living with a friend, in a company accommodation or even a hotel, you should be able to talk to the insurer and get coverage with the temporary address you are living in and change when you move to your new home. This can happen when moving interstate and it may take time for people to find their footing or their new place may not be ready yet. This usually shouldn’t cause a major concern as long as you can provide the place you are staying as your address.

Normally, policyholders don’t need to change their policies if they are living out of state for a short period of time and they can still drive with their insurance from their home state. Most states don’t require people to change their insurance, driver’s license or vehicle registration if they are there less than a month and they have a home in another state.