From One State to Another: How Moving States Affects Your Car Insurance
There's a lot to do when you move to another state. Packing up all your belongings, cleaning your old space, and finding a new place to live are all probably pretty high on your to-do list. Once you get into your new home, you'll need to set up everything that makes your place comfortable—electricity, internet connectivity, and water. One thing that may not cross your mind is your auto insurance.
When moving states, car insurance requirements change. Some states require higher minimum liability coverage, so you must update yours to meet the minimums. There's also a chance your current insurance provider doesn't do business in your new state, so a carrier switch may be necessary. Here's what you need to know about the impact of relocation on car insurance.
How should you update your car insurance when you move to a different state?
Before dropping your first box of belongings at your new home, consider updating your car insurance. You don't want to risk moving to a new state without adequate coverage that meets state requirements.
You have a few options to change car insurance in your new state. If you're happy with your current carrier, you can notify them of your change of address and amend your coverage amounts accordingly. Usually, this is a simple update you can complete online through your carrier's website.
However, moving is an opportunity to evaluate all the car insurance options available. You may find you can lower your insurance rates by comparing quotes from different providers rather than sticking with your current insurer. You may also need to switch carriers if your insurance provider doesn't do business in your new state.
Start by finding out your new state's insurance requirements. That information is usually available through the state's Department of Motor Vehicles website. Once you know the coverage minimums, you can request quotes from your current carrier and other insurers.
Keep in mind you may need insurance coverage above state minimums. For instance, if you don't own your car outright, your auto loan provider may require you to carry additional insurance. You may also wish to get extra insurance as a safety net against weather damage or theft. Decide how much coverage you need or want before requesting quotes.
Why do car insurance requirements vary by state?
Every state has the authority to set its own car insurance minimums. Government officials decide on what they feel is the right approach to ensure highway safety and protect drivers and passengers, and one tool they use is setting minimum insurance requirements. It's your responsibility to understand state insurance requirements when moving.
Most states require minimum liability coverage, including bodily injury per person, bodily injury per accident, and property damage per accident. For instance, a 25/50/25 minimum liability requirement means the insurer covers up to $25,000 in bodily injuries per person, $50,000 in bodily injuries per accident, and $25,000 in property damage per accident.
A minimum liability policy only pays for injuries or property damage other people suffer in an accident you cause. It won't pay for your injuries or damage to your vehicle. If you want to protect yourself and your property in an at-fault accident or vehicle theft, you'd also need to purchase collision and comprehensive coverage.
A few states require other types of coverage as part of their minimum insurance requirements. Some examples include underinsured or uninsured motorist coverage and personal injury protection. Underinsured or uninsured coverage protects you if a driver injures you without insurance in a collision. Personal injury protection pays for you and your passenger's medical treatment if you're injured in an accident, regardless of who is at fault.
What factors can cause your insurance premiums to change when you relocate?
Moving to a new state will likely change your premium amount. Insurers consider multiple factors when setting premiums, some involving your geographic location. A few of the geographic factors that can influence rates include the following:
- Crime Rates: Moving from a low-crime to a higher-crime area will likely increase your insurance rates. Insurers consider instances of theft and other crimes when setting rates.
- Traffic Density: Driving in a high-population area such as New York City or Washington, D.C. may increase your risk of an accident compared to less populated cities and towns.
- Natural Disasters: Living in an area prone to tornadoes, hurricanes, or other natural disasters may increase your insurance rates since there's a higher risk of property damage.
- Claims History: Moving to a state with lots of car accident lawsuits and claims can boost your insurance premiums.
- Carrier Competition: If you live in a state with many carriers vying for your business, your premiums may decrease.
Of course, location isn't the only factor that impacts insurance costs. Carriers also consider other aspects, including the car you drive, your age, driving history, and coverage amounts.
How long do you have to update your insurance after moving to a new state?
Along with updating your insurance, you'll need to register your vehicle and get a driver's license in your new state. Most states require you to have insurance that meets state requirements before registering a car or acquiring a new license.
The legal timeline for registering a car and getting a new license ranges from 30 to 90 days following a move. The state may impose fees or penalties if you fail to register your vehicle within the grace period.
It's a good idea to shop around for insurance before you move and set your new policy's start date on your move-in date. That way, you'll have valid insurance in the event of an accident. It also streamlines the registration and licensing process since you can provide proof of insurance coverage to your state's DMV.
“ The legal timeline for registering a car and getting a new license ranges from 30 to 90 days following a move. ”
Can moving to another state affect your car insurance discounts and benefits?
Moving to a new state shouldn't impact your existing discounts if you stick with the same carrier. For example, if you receive discounts for paying your premiums on time or having certain safety features on your vehicle, a move doesn't impact those. However, your premiums can still increase or decrease based on geographic location.
If you decide to shop around for insurance, other carriers may offer additional discounts or benefits if you sign up for a new policy. There's no harm in shopping around, and the extra savings can be worth the effort.
Frequently Asked Questions
Do I need to cancel my current policy before moving to another state?
No. You want to maintain continuous insurance coverage, and canceling your policy entirely means a coverage gap. If you prefer to stick with your existing carrier, notify them of your new address. They'll update your premiums accordingly. Consider requesting insurance quotes from a few other carriers to compare options and whether you're eligible for additional savings.
What documents will I need to provide to update my insurance policy after moving?
Insurance carriers may require you to verify your new address and zip code with a recent pay stub, W-2, or utility bills. The process varies by insurer, so check with your carrier to see what documentation they require.