Moving to a new state involves a long list of changes, including making sure your car insurance coverage is up to par according to the regulations of your new state. While it’s possible to have car insurance issued in a state that differs from the one your license came from, this can only be a temporary situation at best. At some point, you will be legally required to have your insurance policy and your driver’s license issued in the same state where you live.
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The problem with having your driver’s license and car insurance policies from different states is the fact that insurance regulations differ from one state to the next. For example, if you are licensed by the state of New York as a driver, yet you move to Michigan and get a new car insurance policy, your insurance company may be forced to cover you under New York regulations – which may or may not be the same as Michigan regulations. To avoid such complications, states require drivers to resolve these sorts of conflicts within a specified period of time.
Why would it matter in which state I have car insurance?
Car insurance requirements vary according to which state you live in. Each state regulates insurance and some have certain requirements based on what type of coverage you need and/or what the minimum limits you carry need to be.
Car insurance companies use a variety of factors when determining how much to charge you for your car insurance policy. They take into consideration for what you use the car and where it is stored the majority of the time.
To find out car insurance regulations for different states you can go to the NAIC’s website.
What if I move to a new state, but think it might only be temporary?
How the various states treat temporary status varies from one to the next. Illinois for example, considers you a permanent resident after having established a dwelling with a legal address for more than 30 days. The one exception to this is university students who are always considered visiting residents. So, if you move in to Aunt Mabel’s house, and you’re there for more than a month, you would be considered a permanent resident on the 31st day.
In almost every state, once you reach the time limit to be considered a permanent resident, you then have 30 to 90 days to obtain a new driver’s license and have your car insurance transferred to that state. Failing to do so could result in substantial fines, registration suspension, and license suspension. For transient workers, these laws generally don’t apply because they don’t maintain a legal address in the state where they are working.
Will my current car insurance company cover me in my new state?
If your car insurance is provided by a nationally known insurance company it’s quite likely that they will be able to cover you regardless of the state you live in. However, you can’t simply move and fail to inform them that you’ve done so. State laws require specific coverage minimums which may be different between your old and new states of residence.
Your insurance company needs to be informed of your move so that your policy can be adjusted accordingly. Failure to inform them could get you into trouble.
On the other hand, if you are insured by a smaller, regional provider, you may have to search for a new car insurance company. This is because car insurance companies must be licensed to do business in the various states. And since regional insurance providers are only licensed in a limited number of states, they may not be able to provide you coverage in your new home.
Make sure you ask your car insurance provider about this as soon as you know that you’ll be moving. Qualifying as a permanent resident in another state may mean an automatic lapse in your insurance if your provider is not licensed to do business in your new state.
If I live in a different state than my license is from, should I change my car insurance?
Because where you live affects your car insurance rates, you should insure your car in the state in which you are currently residing. There may be reasons why you wouldn’t change your driver’s license, but it is a good idea to switch your car insurance.
When you move to a new place, your insurance rates will be determined by a couple of things. How you use your vehicle will be a factor, such as if you use your car for commuting, pleasure, or business. In your new state, you may be able to lower your car insurance premium if you are now using your car for pleasure rather than commuting, for example.
Where you live may also affect your car insurance premium. If you live in a safer neighborhood or keep your car overnight in a safer place like a garage, your rates will more than likely be lower.
The bottom line is that most states will require you to insure, register, and plate your car in the state in which you will be doing most of your driving.
How do I get my new license and insurance coverage?
Obtaining your new car insurance is a fairly easy and straightforward process. You simply inform your insurance carrier of your move, the date it is effective, and how much coverage you want to carry in your new state. They will take care of the rest. However, be advised that your insurance company will inform both your old and new states of the change, which may have an effect on your vehicle registration.
As for your license, you’ll probably have somewhere between 60 and 90 days to surrender the license from your old state and apply for one from your new state. In almost every case, the whole process can be completed in a matter of hours and requires nothing more than an eye test and a computerized background check. Some states may require the passage of a written test, but these written tests are generally very easy and can be completed in less than 30 minutes.
For your own protection, it is always best to be honest about your state of residency and make sure your license and car insurance are from the same state. While it’s sometimes possible to get around this, it’s almost always a bad idea.
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