Will my car insurance work in a different state?
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UPDATED: Mar 13, 2020
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Auto insurance laws vary from one state to the next, and sufficient coverage in one area may not be enough in another. This is why it’s important to speak with your insurance agent prior to moving to a new state; the agent will be able to help you update your policy to match the needs of your destination. For shorter trips, however, it’s not necessary to change your auto insurance policy. Whenever you travel across the country for business or a vacation, your auto insurance will always behave according to the laws of the state where you’re visiting.
Do I Have to Change Coverage to Vacation?
Some states have more stringent minimum insurance requirements than others. For example, the limits of liability in some states are much higher than in others. Some states also require the insured driver to pay for their own medical costs following serious auto accidents, whereas others will allow the insured to sue for injuries or file against the at-fault driver’s insurance.
If you do not have sufficient auto insurance on your vehicle, you will not be able to register it in the state where you live. Furthermore, if you’re pulled over or involved in an accident and police discover that you have insufficient coverage, you will be ticketed and your license may even be suspended until you obtain the appropriate amount of coverage.
When moving to a new state, you have 30 days to change your car registration and move over your auto insurance. If you fail to do so, you may be ticketed. If you will not be in a different state for a long amount of time, you don’t need to change your registration. For example, if you are an itinerant worker or student, you might not need to move over your registration; you also do not need to make these changes if you are visiting another area on vacation.
What Happens if I Have an Accident in Another State?
Because insurance laws change from one state to the next, insurance companies must have procedures in place to deal with accidents that happen outside of the policy state. In most cases, collisions are always handled according to state laws where the accident occurred, while other types of incidents, such as comprehensive claims, are handled according to the policy state.
For example, in the state of New York, damage to a rental vehicle is always paid under the driver’s liability insurance, not their collision coverage. New York is one of a handful of states that does this, and it allows a driver to cover damage to a rental vehicle without needing to pay a deductible toward that damage.
If you are from a different state but rent a car in New York, this law will apply to you as well, even if your home state handles these accidents differently. Similarly, if you’re from New York and rent a car in a different state that does not handle the claims this way, you may be responsible for paying potential damages under collision coverage instead.
Other specialized coverages work the same way. For example, all drivers in Michigan are automatically covered under broadform collision coverage no matter what state they are from. This means that if you are ever involved in an accident that’s not your fault in Michigan, regardless of your home state, your deductible will be waived.
On the other hand, some things are policy-specific and will apply no matter where the damage occurs. For example, in most states, only glass that you can see through, such as windows, is covered under a full glass policy. This means that broken windows can be covered without paying a deductible, but mirrors and headlights don’t count as glass and thus have a deductible. Arizona handles this differently; in Arizona, all glass is covered under a full glass policy, so broken mirrors can be replaced without a deductible. This is true of any car insured in Arizona, even if the damage occurs outside of the state.
If in Doubt, Ask
Auto insurance laws can be very complicated, and it’s difficult to keep them straight. For the most part, if you have full coverage on your vehicle, you will be protected no matter where you go. Determining what insurance laws apply to your loss is the job of the claims department, and most of these investigations will go on behind the scenes so you should not have to worry about it.
Nevertheless, if you have any concerns about the way your auto insurance will function in any specific situation, you can always contact your insurance company to ask. In some cases, the agent may not know what will happen until an actual claim is filed, since these situations can be extremely specific, but they will be able to give you a basic idea so that you can plan accordingly.