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Managing Your Car Insurance When Moving

Bankrate logo Bankrate 8/13/2020 Lisa Melillo
a person holding a baby: A man and woman play with their small child after a hard day of moving boxes into a new home. © Blend Images - LWA/Dann Tardif/Getty Images A man and woman play with their small child after a hard day of moving boxes into a new home.

When you move, you'll also need to update your car insurance to reflect the move. Your insurance company and state laws both require you to carry a policy with your current address, and the penalties for failing to do so are severe. Here are the steps you need to follow.

Do you have to change car insurance when you move states?

Because car insurance requirements vary with every state, moving across state lines usually means a significant change to your policy. You may need to update the type and amount of coverage to comply with local regulations.

Insurers also require you to update your policy when you relocate. Car insurers set rates based on risk, and the risk of insuring your vehicle can go up or down when you move to a new home. If you get into an accident in your new state and your carrier finds out you haven't notified them of the address change, your claim could be denied and you might even face policy cancellation.

It's possible that your current insurer won't be licensed to write policies in your new state of residence. If this is the case, you'll need to go through the process of switching carriers once you move to your new address.

When should you switch your car insurance while moving?

Not only do you need to update your car insurance when you move to a new state, you only have a finite period of time in which to do it.

Most states have regulations in place that require you to switch over your license and registration within one to three months of setting up residency, which means also updating your insurance to meet local requirements. Specific requirements in your new place of residence can be found by checking with the state DMV.

Your insurance company may require you to update your address even sooner. Ask your insurer about its specific policies.

How do you switch your car insurance after moving?

Follow these steps to switch your car insurance when you move:

  1. Get quotes from multiple insurers. Even if your current insurance company can provide coverage in your new state of residence, there's no guarantee that it will offer the best rates, even if it was the cheapest at your old address.
  2. Find out if your insurer will charge any fees if you cancel before the end of your term. Some companies impose a termination fee, which may mean it makes more financial sense to stick with your current provider until your current term is up, even if rates are slightly higher.
  3. Notify both your old and new insurance company of your move date. It's imperative that you don't have any lapses in coverage between policies; not only is this against the law, it also exposes you to a great deal of risk. Make sure your new policy begins on or before the last date of your old one.
  4. Confirm that your policy is canceled once you move. Some insurers require written notice of cancellation before a certain date, so check that you aren't being double billed for insurance after your new policy kicks in.

Don't forget to check if your state or insurance provider have additional requirements.

Does moving affect your car insurance rate?

The short answer is that yes, moving can easily affect your car insurance rate - even within the same city. Auto insurers in most states (though notably, not California) mark geographic locations by ZIP code to determine car insurance rates. The ZIP code represents factors such as population density, disposable income per capita and accident frequency, to name a few.

A Bankrate survey found that prices for car insurance can vary widely at two addresses a relatively short distance apart but in different ZIP codes. The study, which looked at three hypothetical customers with varying driving habits, compared insurance rates with neighboring ZIP codes and found differences in prices - sometimes big differences.

What other things should you consider for insurance after moving?

Updating your insurance isn't the only thing you need to do to drive legally in your new state. Remember to complete these actions as well:

  • Transfer your driver's license. Usually, you only need to present your current license along with additional forms of identification and proof of address. You may also need to take a written exam and/or pass a vision test in some states. Check with your local DMV for more details.
  • Update your registration. While you're at the DMV getting a new license, you can also register your car in your new state. You'll need to show proof of updated insurance to do so.
  • Get in-state license plates. Once you've registered your car, the DMV will mail you a new set of local license plates. Promptly attach them to your car and mail the old ones back to the DMV to be destroyed.

These steps will make sure you're legally able to drive.

Frequently asked questions

How long do I have to update my car insurance when I move?

State regulations usually give you around a month to update your car insurance, but you should check with your insurer to ask about their requirements.

Will my car insurance rates go up after I move?

Depending on the risk factors in your new ZIP code, your car insurance premiums may go up or down when you move.

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