Do I have to have car insurance from the state my license is in?

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Deciding on which insurance company will represent you in case of an auto accident is no laughing matter. Knowing the basic rules of car insurance can save you a lot of time and money, especially if you want to insure your car in a state other than the one in which you hold your current driver’s license.

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Every situation is different. Sometimes, due to some household dilemmas, you may live in one state temporarily with the intentions of returning to the state in which you have your license. In those situations, it is extremely important for you to consult your insurance agency to see what options are available to you.

Know the Requirements of Your Resident State

According to the Better Business Bureau, every state except one requires that you carry auto insurance. This is to ensure that the driver will cover any personal or property damages.

New Hampshire is the only state that does not require drivers to have auto insurance, as stated on the Drivers’ License website. New Hampshire law states that as long as you have a valid driver’s license in that state, and you can prove that you have enough monetary funds or some other type of security that could be used to pay for any potential bodily injury or property damage due to an accident, auto insurance is not mandatory.

As a licensed driver and as a consumer, you should be aware of what is required of you. Because every state is allowed to regulate its own vehicle and insurance requirements, it is up to you, the consumer, to know what type of coverage is necessary for your insurance policy to be valid.

The Rocky Mountain Insurance Information Association (RMIAA) also has much to offer when it comes to auto insurance. This company specializes in the specific requirements of the following states: Colorado, New Mexico, Utah, and Wyoming.

If you have insurance in Colorado, for example, the RMIAA gives a detailed outline of what that state requires of its drivers and the minimum coverage needed to operate a vehicle in that state.

Consult Your Insurance Company

Some insurance companies are large enough to where they can offer insurance policies that have nationwide coverage. This means that if you do have to move to another state, you simply call the agency and inform them to update your account while continuing to be insured in another state while having your driver’s license and insurance policy based in another state.

Other car insurance companies are only licensed to offer coverage in a particular state or states. Before you move, take a few minutes to call your insurance company. Ask an agent to verify the coverage that is available to you since your license is registered in a state other than the one that your policy is in. If they do not offer coverage to the state you are moving to, at least you will be aware to begin looking for another insurance company.

If your insurance agency is not authorized to sell insurance in the state in which you are going to, do not immediately assume that you should terminate your policy. Inform them of your intentions of relocating to another state while retaining your driver’s license in your original state, and they may be able to offer coverage for a set timeframe that is approximately 30 to 90 days. This temporary extension of your policy will offer coverage for your vehicle until you are able to secure another insurance policy.

Your Residence Determines Your Driver’s License

The address at which you receive your mail is considered your official residence. This is what determines the address that the Department of Motor Vehicles (DMV) will include on your driver’s license. If that address is different from the one on your insurance policy, be sure to have your insurance documents ready to prove that your policy covers your vehicle in the other state.

When purchasing an insurance policy, the insurance carrier will require a copy of your license to make sure that it is current. It will show what state your official residence is in as well. This will help in determining if that insurance agent can offer a policy for you in a state that differs from the state listed on your driver’s license.

Before you can register your vehicle at the DMV, you must have proof of insurance in most states, which is dictated by the Compulsory Insurance Law. This law states that no vehicle can be legally registered in that state unless it covered by a licensed insurance carrier that provides the minimum coverage required by that state.

If your insurance carrier is licensed in that state, all that may be needed is a simple update to your policy that includes coverage to you in the state in which your license is registered and the one that your vehicle is being driven.

Know what is in Your Policy

Insurance agencies can be very picky. Some carriers may require you to register your car in their state in order for them to provide coverage for you. This could mean that you would have to transfer your driver’s license over to that state as well. However, before you start the process of transferring all of your documentation, check with the DMV in that state as well as your insurance agency to see if it is even necessary.

Some states, such as New York, mandate that if your vehicle is registered in that state then you must carry insurance from a licensed agent within the state of New York as well. Of course, there are exceptions to this rule for people such as those who are active military or college students. Those exceptions can be outlined in your insurance policy of which state that you are allowed to have your car registered in that state with an insurance policy and driver’s license held in another state.

In special circumstances, such as active duty military, you may be required to travel more than the average person. Insurance agencies recognize this and often offer flexibility to those particular policies. Military people may retain their driver’s license in their home state while driving and being insured in another state. Often times, however, military people opt to keep their license, registration, and insurance all tied to their home state just to simplify the process during their many moves.

Understanding your policy is very different from simply purchasing one.

It is your responsibility as a conscientious driver to know what your policy covers and to where that coverage extends. If your driver’s license is in one state, but you need insurance in another, that may or may not be possible.

The website for J. D. Powers, outlines the categories of your policy that you need to understand such as bodily and property damage, liability, and full coverage in order to be aware of what types of coverage you do and do not need in a basic insurance policy.

Be Ready for Your Rates to Change

Even if your insurance carrier offers coverage in the state in which you live, be ready for the rates to change in order to accommodate that state’s regulations. It may behoove you to call other insurance agencies for quotes even if your current provider offers coverage in that state. The new rates may be slightly lower or higher due to that state’s regulations.

Before Switching Insurance Companies, Do Some Research

Before changing insurance companies, check out different group business ratings at the Better Business Bureau (BBB). Just because they offer lower premiums and rates, does not necessarily mean that they are the best choice. State Farm, for example, has a rating of a B+ that can be viewed at the BBB website. These reviews are free to the public and are worth checking out.

If your driver’s license and insurance are in your home state but you are temporarily residing in another state, your insurance carrier may not even require you to change your insurance to that state since you are planning to return to your home state. All carriers are different, so make sure that you discuss the details with an agent before making any assumptions.

Consult the Insurance Information Institute (III) website to familiarize yourself with your state’s specific auto insurance requirements. This could save significant amounts of time and energy in the long run. The III offers more information on the determining factors of your policy rate changes. Discuss these items with your agent when you are looking to insure your vehicle in a state other than the one in which you are licensed.

There is nothing worse than thinking that your vehicle is properly insured only find out after an accident that your policy was not what you thought it was.

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