So you are planning to move to a new state, perhaps for a new job, or maybe the weather in your current state is really bad (poor residents of Ohio). Moving to a new state brings in a lot of changes, and these changes must be done the right way to avoid issues.
One of these important changes is car registration and insurance provider change. Registering your car in your new state is mandatory and each state has its grace period in which you need to get your vehicle registered. But what about a car insurance company?
Changing Car Insurance Company
It is not mandatory to change your auto insurance provider when you move to a new state. This is because most of the states in the US have similar laws regarding car insurance; having liability coverage, personal injury protection plans, uninsured motorist coverage, etc.
Since car insurance companies know that people change their state often, most major insurance providers have nationwide coverage. This means that no matter which state you move into, if your insurance company is present there, you don’t need to change your car insurance company. But this does not mean you shouldn’t.
How to Change Car Insurance When Moving Out of State?
Here’s a step-by-step guide to changing your car insurance company when you move your company out of your state or you’re relocating.
Step 1: Talk to Your Current Insurer
The first thing to do is contact your insurance agent or insurance company and ask them if they operate in the state you are moving in. If they offer service in that state, then you won’t have to change your insurer. The insurance company will transfer your policy (which can include a change of price of the policy)
Step 2: If They Don’t Operate in the New State
In case your current auto insurer does not offer their services in the state you are moving in, then you’ll have to choose another car insurance company and select their plans. Make sure you find the best and most affordable car insurer.
For example, if you are moving to Nevada, look for cheap car insurance in Nevada and select the company that offers the best policies at the best price. After you finalize your choice, buy all the mandatory and optional policies.
Step 3: Cancel Your Current Policy
After you have bought the new auto insurance policy (and completed registration, etc), only then cancel your previous policy. Canceling your current car insurance policy before you buy the new one is not a safe thing to do.
There are many cases where activation of the new policy might be delayed, and if you have already canceled your previous policy, this creates a “coverage gap” in your insurance. This “gap” can lead to inflated insurance costs in the future.
Is There a Price Hike?
Moving to a new state can increase or decrease the cost of living. But what about insurance costs? Different states have different laws regarding car insurance. This could lead to either an increase or decrease in insurance costs.
The factors affecting your insurance rates (when moving to a new state) include:
- Your driving record
- State’s laws
- Your locality
- Insurance company
- Credit score
Having a bad driving record affects your insurance rates negatively. This means that the more tickets, points, and accidents you have, the higher rates you’ll have to pay for your car insurance. But the state you live in also makes a lot of difference.
For example, speeding tickets might not increase your insurance rates in some states, while in some it can make your insurance rates jump sky-high. Some states treat rash driving mildly compared to other states.
The best way of avoiding a price hike is to keep your driving record clean, avoid tickets, and avoid getting in accidents. No matter which state you go in, with a clean driving record you’ll save a lot of money.
Here’s how your new state’s laws might affect your insurance rates. Let’s say you currently live in a state where only liability insurance is mandatory. So your car insurance includes liability insurance and some optional coverages like collision and comprehensive insurance.
But what if you move to another state where not only liability insurance, but personal injury protection and uninsured motorist coverage are mandatory as well? You’ll have to buy the three, along with collision and comprehensive coverage. This would lead to higher insurance prices and premium rates.
Not just that. Some states have a higher minimum coverage limit (the maximum amount your insurance policy must pay for liability insurance). Higher coverage limits mean higher insurance premium rates.
The area you live in (your ZIP code) also affects your insurance rates. If your area has higher rates of car accidents, theft rates, etc, insurance companies will charge you more.
So if you move to a new state and a new place but this place has higher rates of, say, car theft, you’ll end up paying more for comprehensive coverage. The reverse of this is also true; if you move to a place where car accidents and thefts are low, your insurance rates will decrease.
This one is an obvious factor. The car insurance company you choose affects your insurance and premium rates. Even if you do not change your auto insurer, you might have to pay more or less. This is because the insurer might need to include higher coverage limits, different policies, etc based on the State’s requirements.
Make sure that you choose to go for a new car insurance company that offers the best coverage at the lowest price. Do not go for the cheapest option while neglecting the coverage or the consumer experience.
Some states take credit score as a factor while deciding your insurance rates, while some states abstain from it. For example, California, Massachusetts, and Hawaii have stopped insurance companies from using credit scores as a factor in deciding rates. But other states use it.
So this was the entire process of changing your car insurance company when moving to a new state. You might not need to change your car insurance company if your current company is present in the new state. Contact your insurance company or insurer to know more.