Updating Your Car Insurance Policy When You Move
Preparing to move to a new state requires a lot of thoughtful planning. One of the main pieces of cargo that needs transporting is your vehicle.
But one important part that often gets neglected for the move is updating your car insurance policy to reflect your new state’s requirements. Since every state has different minimum requirements, you want to make sure you are covered if you are in an accident.
By updating your insurance policy before the move, the process will move smoothly, and you will feel the peace of mind knowing you are covered when on the road.
Here are a few steps that should be taken with your car insurance:
Reviewing and Updating Current Auto Policy:
The very first step you should take is to let your current car insurance company know that you are moving to a new state. You will be guided on the next steps to proceed to receive coverage. It is important to know that some insurance companies aren’t licensed to insure people in certain states.
Even if the company is allowed in your new state, your agent likely doesn’t have a presence in your new area. So, you are going to need to find another agent and/or insurance company anyway.
Also, you may find that your current company offers a ridiculously high rate in your new area due to varying rate factors.
Cost and Rate Factors
Different areas have different rates which can be affected by a few variables such as the location’s population. Urban areas tend to pay more for car insurance than rural areas due to more drivers on the road. More drivers equal more risk for accidents, which increases rates. The opposite is true for rural areas which often pay much less for coverage.
Also, some states and cities have higher crime rates than others which might affect your car insurance if your car was ever stolen. Insurance companies use this sort of data to determine your new rates. Here are a few other factors that affect car insurance rates in your new area.
(See Also: Hidden Moving Costs to Pay Attention To)
Avoiding Holes of Coverage
You don’t want to cancel your current car insurance policy quite yet though for the short term until you make sure you purchase a new one. There is a chance you could be given a higher rate if your insurance company sees that you have a gap in time where you didn’t have coverage.
You will have 30-90 (depending on state and insurance company) days to purchase new insurance, register your car after you moved, and update your license.
Shopping Around for Insurance
It is recommended that you compare insurance companies within your new state because you never know if you might receive a better rate. There are differing underwriting processes which affect the rates in different areas.
(See Also: Moving Checklist)
Liability Coverage Minimums
Some areas have much higher levels of coverage than others.
Insurance companies require that you keep a minimum liability coverage which varies from state to state (other than New Hampshire which doesn’t require car insurance). It is broken down into 3 basic components. For example, California requires a 15/30/5 which is the same order as below.
- Individual Bodily Injury Liability (BIL):This is the most your insurer pays for one person injured in a car accident. It applies only to people named on your policy. State minimums range from $10,000 to $50,000.
- Total Bodily Injury Liability:This is the most your insurance company pays for everyone injured in a car accident. It applies to you and people not named on your policy. State minimums range from $20,000 to $100,000.
- Property Damage Liability (PIL):This is the most your insurance company pays for property damage caused by a car crash. This includes all physical damage such as vehicle damage and damage to road fixtures. State minimums range from $5,000 to $25,000.
You will need to take these actions if you plan on being able to drive the car once it arrives to your new home. Take our advice and get it done before we move your car so that you can use it right away with full coverage and a peace of mind.
(See Also: Weekly Guide to Your Next Move)
Nathan Barber, Guest Blogger
Nathan is a Content Specialist for QuoteWizard. When he isn’t watching or playing soccer, you can find him on the mountain skiing.