Do you need new car insurance when moving to a new state?

From securing a new place to transferring utilities and packing all your belongings, it's easy to get overwhelmed by everything that a big move to a new state entails.

One thing you won't want to overlook, though, is making sure your car is still covered by the right auto insurance policy in your new state. Not only is car insurance mandatory in most states, but you'll want that protection and peace of mind in the event of an accident.

So, do you actually need to buy a new auto insurance policy when you relocate to a new state? And, if so, how does it all work?

Do you need to buy a new policy if you move out of state?

Simply put, you generally do need to purchase a new car insurance policy when you move to a new state. Since insurance laws differ from one state to the next, you can't expect a policy for one state to cover you when you're registering and driving your vehicle in a different state.

Take the example of a person moving from Michigan to Ohio. From a car insurance standpoint, Michigan is a “no-fault” state. This means if there’s a crash, all parties involved are covered and reimbursed by their own insurance, up to the limits on their policy, regardless of who caused the crash.

This distinction has a significant impact on how car insurance works in Michigan. Drivers living in this state must carry a minimum of 20/40/10 in bodily injury and out-of-state property damage liability coverage, as well as up to $1 million of in-state property protection. Drivers also need personal injury protection (PIP), which is what kicks in to cover all reasonable and necessary medical expenses after a crash.

Ohio, on the other hand, is not a no-fault state. Drivers are legally required to carry 25/50/25 in bodily injury and property damage coverage. Because drivers are assigned fault for crashes in Ohio, there is no need for PIP coverage, and so state-minimum car insurance tends to be less expensive in Ohio than in Michigan.

Somebody moving from Michigan to Ohio, then, will want to make sure their bodily injury protection is high enough to meet state minimums and that they're no longer paying for PIP if it is an optional coverage. 

Do you need to switch insurance companies?

While buying a new auto insurance policy may seem like a hassle, the good news is that if your current carrier sells insurance in your new state, you can typically just get a new policy from the same company. You'll usually only need to switch carriers if your current insurer doesn't do business in your new state.

If you're not moving out-of-state, you won't need to change policies. However, you will need to update your address on your current policy to ensure that your coverage is up-to-date.

Will insurance in a new state cost more?

Some states require more coverage or higher minimum limits than others, which can raise premiums. However, it really boils down to which states you're moving between and exactly where within the state you live. Coverage in some areas may be higher due to higher incidences of crashes, auto theft, or other claims.

As always, be sure that you're taking advantage of the auto insurance discounts your carrier offers. AAA offers auto insurance discounts for multi-car policies, good driving, select professional and alumni associations, and more. 

What are the steps to take once you know you're moving to a new state?

If you're preparing for an out-of-state move, it's best to contact your current car insurance company in advance. If they provide coverage in your new state, they'll be able to advise you on how much coverage you may need and exactly when your coverage will change over.

Different states also have different rules regarding how long you have to get everything switched, so be sure to do your research here and stay informed. For example, you typically need to have auto insurance coverage in your new state before you'll be able to register your vehicle. 

Since you're already changing your auto insurance policy, this may also be a good time to get quotes with a few different companies.

  • If you remain with your current insurance carrier, there's a good chance they'll offer to automatically cancel your current policy and start your new policy on the same date. This way, you won't have to think about it again. 
  • If you'll be switching carriers, on the other hand, you'll need to remember to reach out to your old insurance company and formally cancel your policy on the day your new coverage kicks in.

Once you have your new insurance in place, all that's left to do is complete your state's requirements for registering your vehicle and getting a new driver's license.

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