Car insurance when you move to another state
Insurance and states
The US Constitution is basically simple. Every state in the union is sovereign. It has its own parliament and legal system. All the states have signed up to join the federation we call the United States. This is responsible for the big ticket items like defense. Most other things are adjusted state by state. This includes insurance. Every state licenses insurance companies to sell within the state borders. No insurance company is allowed to sell policies across state lines.
Where do you have your home?
The basis of calculating your premium is who you are and where you live. The assumption is that you will have a place you call home. You can also own properties elsewhere but, for these purposes, you have to choose one as your principal residence. Hopefully, it has a “good” ZIP code because, except in California, the ZIP code influences how much you pay.
What happens if you move?
If you change your home address, you must immediately notify all the insurance companies that carry your homeowners, health, life and car insurance policies. A failure to notify can give the insurer the right to cancel your policies.
Moving within a state
Potentially, you can stay with the same insurance companies, but be careful. When you change address, this can change the risk of loss. Suppose you move from a “good” to a “bad” neighborhood, the insurers will ask for a higher premium to continue insuring your home and vehicle(s). Before you relocate, always check what will happen to your car insurance premiums at the new ZIP-coded address.
Moving out of state
Remember, insurance companies cannot sell policies across state lines. If your current insurer does not hold a license to sell policies in the new state, you will have to change insurers.
Before you move across state lines
Always check on the laws of the new state. Every state has slightly different rules on car insurance, with different mandatory requirements and different levels of consumer protection. Each state has its own Commissioner responsible for regulating the insurance market. In GOP states, the regulation is minimal. In Democrat states, you can find high degrees of protection for your rights.
Timing the move
Look carefully at your current car insurance policy. Some have charges if you try to cancel early. Most require you to give one or two months notice of cancellation. Make sure you do not have two policies in force at the same time. Start the new policy at your new home only when the old policy runs out.