I’m Moving: Do I Need New Auto Insurance?
If you have found a new place to live, you may already be inundated with paperwork concerning new telephone and electric service, cable television and other utilities.
You may be discovering new routes to travel to work and school, finding new places to shop and meeting new neighbors. However, you may still have questions about things that you did not consider much in the past. For example, you may not be sure if you need new auto insurance as a result of your move.
The simple answer to that question is yes if you have changed zip codes and no if you have not. However, as with any simple answers, there are a multitude of exceptions to the basic rules.
How Auto Insurance Rates Are Calculated
Auto insurance rates are based on a number of factors. Your age, driving history, gender and marital status will all impact your insurance costs. Even your credit score may come under scrutiny. One major factor that will affect your rates no matter what your other demographic factors, however, is your geographic location.
Insurance rates are based on risk. People who live in large cities have more fender-benders and parking-type accidents, so collision rates tend to be very high.
Hit-and-runs are also more common in cities than in the country, so uninsured motorist rates tend to be high as well. However, rural areas tend to have more high-speed accidents, so liability rates and personal injury protection may actually be higher in rural areas than in the cities.
Insurance rates based on where you live are generally figured from your proximity to a geographic center or zip code. However, there are also other factors that can influence this rate.
Geography vs. Driving: The “Ten-Mile” Rule
If you live ten miles from a major metropolitan center, you are probably going to pay higher rates than someone who lives thirty miles from the city. This is because the insurance company may assume that you are more likely to drive into the city than a driver who lives farther away.
On the other hand, if you live outside the city center and if your insurance company allows you to do so, you may give an affirmed statement that you only drive ten miles to work and do not visit the city on a regular basis. If your insurance company allows you to do this, you may be able to save money on your auto insurance policy. However, if you are not truthful and have an accident in the city, your insurance company might not cover you. Most insurance companies have moved away from the distance rule and simply rate you based on your geographic proximity to a metropolitan area.
Do I Need To Change My Policy?
It is very likely that you will need to change your policy if you have moved. You may not need “new” insurance but you will certainly need to tell your auto insurance company of your new address and pay any differences between your old rate and your new rate to keep your coverage current.
You will also need to address your need for new or different types of coverage based on where you now live. If you lived in the country, for example, and moved to the city, you may not have felt the need previously for collision coverage. However, downtown living makes collision a more sensible choice as you are at very high risk for a parking lot accident. Similarly, uninsured motorist coverage is essential in most places now but is especially important if you live in a highly-populated area where hit-and-run accidents are very common.
Finally, you will need to decide if your old auto insurance policy is the best fit for your current needs after your move. Many people have discovered that changing geographic locations opens up new opportunities to them to purchase auto insurance that was unavailable in the past. Your new city or state may support insurance companies that were not doing business in your old location. Now is the perfect time to compare rates and discover if you are getting the best price for your car insurance.
Moving can be very stressful, so be sure you begin investigating your auto insurance options as soon as you know about your move. While your old policy will cover you for a short time, the sooner you can move into a new policy that meets your requirements in your new location the less stressful your overall moving experience will be.