The Question of Whether You Can Insure Your Car in a Different State
Insurance

The Question of Whether You Can Insure Your Car in a Different State

The Question of Whether You Can Insure Your Car in a Different State

You may favor the idea of insuring your car in a different state than the one that you live in, for many reasons. You may find yourself visiting the state often, you may attend college in another state, or you may simply be tempted by the lower insurance rates in another state.

Insuring your car in a different state simply to take advantage of the cheaper insurance rates there isn't legal. If you need to buy insurance in another state for other reasons, however, you can do it. It would be a good idea to discuss it with an insurance agent.

Why do insurance costs vary?

Insurance rates tend to differ by state (the states of Virginia and New Hampshire don't require auto insurance). Sometimes, there are differences even among the different cities in a state. If one city in a state has busier streets than another, for instance, or has higher rates of auto theft, insuring a car in the city would understandably be more expensive than in the quieter, safer city.

If you regularly spend time driving in a state other than the one in which you live, however, there are some instances in which insurance companies will sell you insurance for the other state. If you qualify, you only need to make sure that the car insurance policy that you buy lists you as a driver.

If you buy car insurance in another state simply to take advantage of the cheaper rates there, you may get away with it for as long as you don't put in a claim. In the event of an accident, however, the insurer will quickly find out that you live in a different state, and will usually deny your claim, and drop your insurance. There may be criminal penalties, as well.

When it isn't intentional

Moving from one state to another can come with so many responsibilities that you may actually forget to change your car insurance policy. Sometimes, your job may require you to work in a different state for months at a time. When you are in a situation such as this, your insurance company will have special options to cover you. You need to talk to your insurance agent about it.

If a car is driven in a state for more than 90 days a year, it needs insurance for the state. If you have a vacation home in a different state, and you visit the state on a regular basis, you have two options. You may either buy insurance for each state with a company that does business in multiple states, and get a discount in the process, or ask for a special vacation home discount. Some people laboriously go through the process of canceling their car's registration in one state, and applying for new registration in the other state, and repeat the process each year.

When you are in the military and need to travel to a different state as part of your service, your car insurance is always supposed to be for your home state, rather than the state in which you are stationed.

When you live in more than one state for extended periods of time, buying insurance for multiple states is the safest way to go. You may be able to get a discount if you explain the situation to the insurance company, however. Shopping around and getting multiple quotes is always a good practice to ensure you have an understanding of the market rates for your situation.