“What happens to my car insurance when I move into another state?”
This is a question many people ask themselves when relocating. Well, there’s some good news and a bit of bad news here. The good news is that you don’t necessarily have to change your car insurance from there. However, the bad news is that rules might also have changed in your new state that keeping your old policy can cause you more headaches than not. With that said, here’s everything you need to know about transferring states and car insurance.
What is Car Insurance, and Why Do You Need It?
Please skip this section if you already know car insurance basics. Moving on, it’s not uncommon for people to debate whether they should buy car insurance. Does it make financial sense? How will it help me? What are the downsides of having it? Simply put, car insurance provides financial protection in case something terrible happens to your vehicle.
Why would you need this coverage, though? Well, there are many reasons why. For instance:
- If your vehicle is stolen or damaged, afflicted by fire, vandalized, or natural causes, your insurance can help pay for the repairs.
- If you’re at fault in an accident and the other driver is injured, your insurance may help pay for their medical bills.
- If another vehicle hits you and it’s determined that you were not at fault, then your insurer will reimburse you for any damage to your car.
Without car insurance, you would be responsible for all of the costs associated with an accident, including legal fees. That is why required by law in most states, whether you’re driving a luxury car or a regular sedan.
Out-of-State Moves and Car Insurance
The rule surrounding car insurance and interstate moves is simple. If your insurance provider offers coverage at your new home, you only have to confirm with them regarding practices at your new state. Make sure everything is clear with them and that you’re covered the moment you relocate.
On the other hand, when your insurance provider doesn’t operate at your new place, this is where things get a bit complicated. You will have to change providers completely. Relax. Below are the steps to guide you through the process.
Step 1: Reach Out to Your Insurance Provider
This is the most fundamental step to take during your move. Call your insurance provider and notify them that you will be moving out of state. Important reminder: don’t cancel your policy until you’ve successfully bought a new one. Fortunately, most companies offer a 30-day grace period for customers who are moving, so you won’t have to risk anything.
Step 2: Research Your New State’s Insurance Rules
After you’ve notified your insurance provider that you’re moving, the next step is to find out the rules regarding car insurance and registration in your new place. The best way to do so is to check in the state’s Department of Motor Vehicles (DMV).
In some states, drivers are required to get multiple car insurance policies before legally hitting the roads. This is because every state has different laws and requirements for drivers – speeding fines may be more or less expensive depending on where you live, for example.
If your new state requires a particular type of coverage, buy a policy that complies with their rules before driving there. Don’t panic too much, though. State laws also offer a 90-day grace period for you to switch registrations and get new insurance.
Step 3: Understand Your Insurance Needs
Now that you’re informed, it’s time to get your car a new policy. Make sure to calculate any possible risks by buying the right type of policy. Here are some things to consider:
- Are you moving from a high-risk, high-cost area?
- Do you own an expensive vehicle that may be more likely to get stolen or involved in accidents?
- What other ways are you planning on utilizing your vehicle?
On top of that, you should know about the different types of car insurance. Here’s a brief overview:
- No-fault insurance: States with this policy require insurance companies to compensate damage or injury, whether or not the car owner is at fault.
- Property damage liability: This policy covers damage to other people’s property due to the car owner’s negligence.
- Bodily Injury Liability: For this one, the insurance company will cover for medical costs and death during an accident. Depending on the state, there’s usually a minimum limit of $25,000.
- Uninsured/Underinsured Motorist Coverage: This covers the car’s owner in case of an accident caused by a driver without insurance or with insufficient coverage.
Step 4: Compare Quotes Between Insurance Companies
Get your multiple quotes before purchasing a new policy. Remember that you’re looking for the best deal, not just the cheapest quote. You may want to do some research or call friends and family members who live in your new state – they might know which insurance providers are reputable and affordable there.
Step 5: Purchase New Car Insurance
Once you’ve decided on a provider with the perfect rate and coverage for your needs, it’s time to buy new insurance! Remember to factor in any fees associated with transferring registrations, as well as monthly premiums.
Step 6: Have Your Vehicle Inspected for an Emission Test
Before you can register your vehicle, you may need to take it to your new state’s DMV for an emission inspection – this can mean a small fee, but it’s far cheaper than having your car impounded due to not being up-to-date on state vehicle laws.
Step 7: Register Your Vehicle and Apply for Driver’s License
Follow your new state’s registration process to receive license plates for your car. Generally, you will have to provide a driver’s license, a report of the emission test, the title of vehicle ownership, and, most importantly, proof of your new vehicle insurance.
To obtain a new driver’s license, you’ll just have to present proof of your identity, which includes your birth name, birth date, and social security number. Next to that, the DMV will ask for proof of your residency to confirm you are a legal resident of the state.
Step 8: Finally, Cancel Your Old Policy
First of all, congratulations on reaching the final step! As the last step, you will want to return any items your previous insurance company has entrusted to be returned, such as your card or policy. You should also notify your bank and other credit monitoring services of the change in administration for each service. Furthermore, if you have a monthly plan with your provider, cancel it once you’ve got your new policy up and running.
Time to Relax
As long as you took all of the required steps and did not skip any essential steps along the way, then enjoy this new chapter in life! Your new coverage begins from when you buy it. However, it can depend on how recently registration passed when receiving plates for your vehicle. The key is to make sure that you have applied for your new license plates and completed the registration process.
