Drivers who will be traveling to other states while on vacation or for work purposes may be wondering whether their auto insurance policy will cover them while away from home. In most cases, an existing auto insurance policy issued in one state will provide the minimum level of protection required by law in another jurisdiction.
Your auto insurance policy must be issued by a provider licensed to sell coverage in the state where the vehicle is registered. Even if you spend a good portion of your time away from home, the rules about how much coverage you need to have in place are determined by the state where you live.
Minimum Auto Insurance Coverage Requirements
In most states, drivers are required to buy at least a minimum level of coverage and to keep it in place. State law determines what type of coverage is required and how much all drivers must buy to comply with the legislation.
Third party liability coverage is required in most states. This type of insurance is used to pay for claims made by the occupants of the other vehicle following an at-fault accident. It includes bodily injury liability coverage, which is used to pay for medical bills and lost wages incurred as a result of the accident. Property damage liability coverage pays for the cost to repair other people’s property, including the other driver’s vehicle and public property.
Other types of coverage, such as uninsured and underinsured motorist coverage, may be required in certain states. Uninsured motorist coverage pays out when the at-fault driver either doesn’t have any insurance in place or cannot be identified. An example of the latter situation would be a hit and run accident.
Underinsured motorist is used when the level of damages caused in an accident is higher than the amount of liability coverage the at-fault driver has in place. The other driver’s coverage is used up to its policy limit and the underinsured motorist coverage is used to make up the difference.
Auto Insurance Coverage and Moving to a New State
If you decide to relocate to a new state, you will need to change your insurance coverage as well. Your driver’s license and vehicle registration will need to be changed to reflect your change of residence and you will need to buy auto insurance issued by a company from your new home state. Your current policy will be valid for a certain number of days after the move.
In a situation where you are insured with a national company, you may be able to transfer your coverage to your new state. A move is a good example of a change in circumstances where a consumer should consider getting quotes for coverage from a number of providers. Taking the time to shop around will help a driver to find a company willing to offer the best prices for the type and level of protection he or she needs.