How Moving to a New State Affects Car Insurance

Moving to a different state? You may deal with changes to your car insurance, including your rates and company. Find out more here.
family moving to new state

If you’re moving to a new state, you may have to deal with several changes to your insurer. Many providers are regional and don’t do business in every state. So, you might need to change agents, car insurance companies, or both.

You may also have to update your limits and coverages to drive legally in your new state of residence. Laws can vary. Some states, for instance, require more than just liability coverage. And many states have different minimum requirements, causing your premium to go up or down.

This article will help ensure you have the insurance coverage you need when you move to a new state. We start by looking at the many changes you might face, including how you can handle them. We’ll also go over how your rates may change across state lines, even if you’re with the same company. Finally, we’ll answer frequently asked questions about moving and how it affects your policy.

Switching to a New Car Insurance Company

Should you switch auto insurers when you move? The answer to this question depends on your situation. You may find that your current carrier doesn’t operate in your new state. Many providers are regional. This means they may not be able to cover you once you’ve moved. If this is the case, you’ll have to find a new insurance company. 

Even if your company does business in your new home, your agent probably doesn’t. You should reach out to an agent for advice regarding your move. They’ll be more than happy to guide you through the process. Agents are very knowledgeable and should be your go-to resource for all your insurance questions.

When you’re moving, it’s always a good time to consider your options. Ben Guttman, an insurance broker with North Central Insurance Agency who has over a decade of experience in the industry, says that “every carrier’s rates will be different in different areas due to loss ratios and what the state insurance [department] approves.” Because of this, you should keep an open mind and consider comparing the market. The best deal may not be with your current insurer.

Transferring Your Coverage

If you don’t use a regional insurer, your likely course of action is to take your existing policy with you. The first thing you should do if you’re considering transferring your insurance is to talk to your agent. They’ll be able to give you more details about the process and what types of adjustments you’ll have to make.

Because there are varying requirements across states, your coverage might look different in your new state than in your previous one. For instance, you could move from a fault to a no-fault state. Or you might move somewhere with different minimum coverage limits. Due to this, you and your provider will have to draw up a new policy after you move.

Liability insurance coverage is a major example of differences between states as each one sets unique requirements. As an example, below are the differences between California and Texas in terms of the minimum required liability limits:

California (15/30/5):

  • $15,000 per person
  • $30,000 per accident
  • $5,000 for property damage

Texas (30/60/25):

  • $30,000 per person
  • $60,000 per accident
  • $25,000 for property damage

Let’s say you moved from California to Texas. You’d see much different coverage requirements than you did in California. Texas requires its drivers to carry much more auto insurance. This could lead to increased premium costs.

How to Switch Car Insurers

Choosing a new provider can look daunting for many reasons. You might have been with your current company for a long time and jumping in with a new one just doesn’t feel right. Or, you don’t know where to get started in a new state with a likely new market for insurers.

A good starting point in switching carriers is to compare prices from several companies in the place you’re moving to. This will empower you to dive right in and decide which company is the best suited for your needs.

Along with shopping around, it’d be helpful to look up reviews on companies you’re considering switching to. You can also ask around and see if anybody from your new state (e.g., co-workers, friends, new neighbors, etc.) knows about the providers you’re looking into. Choosing a reputable company will allow you to set yourself up for success after you move.

Once you’ve found an insurance company that can meet your needs in terms of price and coverage, you’re ready to contact them and complete the changeover. You should also make sure you tie up any loose ends in your old state, such as canceling your old policy.

How Will Moving Affect Your Rates?

Your rates will more than likely change when you move. And, per Guttman, “Sometimes a move will result in more favorable rates, and sometimes an increase. Places with more restrictive insurance laws, as well as higher risk areas for claims, will usually result in an increase.”

As Guttman points out, a major reason your premium may change is that rates are tied to your zip code. Some areas may have higher accident or crime rates than others, which often leads to more people filing claims. This causes insurers to raise rates to meet the increased costs.

If you haven’t chosen exactly where to move to in your new state, you may want to find an area with less crime and traffic. It might also be a good strategy to review average rates before you decide where to buy your new home.

Car Insurance and Registration Over State Lines

Can you register a vehicle in one state and get it insured in another? Most states require proof of coverage before you can register your car. And many providers require you to insure your car in the state it’s located. You’re better off finding a company that does business in your new state before registering your vehicle.

You must have two separate policies if you move to a new state but still own a home and a car in another state. Guttman notes that “auto insurance goes by garaging address,” or more specifically, “where the car is parked most of the time.” For example, he adds, “If you have it parked in Wisconsin but have a summer house in Illinois, it should be rated based on the Wisconsin address.” In other words, your policy can only have one permanent residence, and that will be what decides your premium. If you’d like to keep cars at both homes, you’ll need separate policies for each.

Bottom Line

Moving to another state can bring up some challenges in the way of auto insurance. First, you’ll have to make sure your policy can come with you. If it can’t, you may need to shop around for a new provider. In most cases, you may also have to face the reality of your rates changing, for better or worse.

Frequently Asked Questions

I live on the border of two states, and I work in another state. Am I covered?

Your car insurance will usually cover you if you live in one state but drive to work in another. Be sure to check with your insurer or agent for specific information regarding your state.

Can I stay on my parents’ policy if I move to a different state?

It depends on certain personal factors. If you and your parents move to a new state, they’ll have to re-add you to their new policy. However, if you move away without them, you will need your own policy. This is because insurance goes by where your car is garaged.

What are regional car insurance providers?

Regional insurance companies operate in certain areas or regions rather than the entire country. It’s unlikely that these insurers will be able to come with you if you move to a new state.

How do I switch agents?

You should contact your current insurer if you want to switch agents. They’ll give you all the info you need about finding a new agent in your new state. Alternatively, you can find an independent insurance agent in your area. These agents have access to more carriers and can help you shop around.

What happens if I don’t update my car’s registration in my new state?

If you don’t update your car’s registration in the time that the state requires, you could end up getting a ticket if you’re caught driving without it.

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