How Does Car Insurance Work If You Split Your Time Between Two States

There are many reasons you might spend a lot of time between two states — perhaps for work, vacationing at a holiday home, or if you’re a student attending college in another state. You can also pass a lot of time between states if you’re in the military or have dual residency for whatever reason. But how does car insurance work if you spend a lot of time in two or more states instead of one? Will you still be covered in case of an accident? Are there penalties if you’re not insured in a second state?

Are You Covered When You Travel Out of State?

Let’s get the most common question out of the way first: if you’re traveling to another state to stay for a while, does your insurance still cover you? The answer is yes for trips of a few days or weeks. Further, if you get in an accident while in a state with higher insurance requirements, your insurance company may raise your coverage to make up for the difference. However, if you plan to stay longer — for months or years — you will have to do something about your car insurance situation.

When You Might Need Insurance in Another State

Now let’s talk about the circumstances that might warrant splitting your insurance between two states. In general, your vehicle should be insured in the same state where it’s registered. But there are situations where it could be more complex.

Work in One State and Live in Another

If you work in a separate state from where you reside, you will likely only need one policy that will cover you in both states — you only need to determine which state your vehicle remains in most often and take out the policy in that state. So if you make your home in one state but are employed in another — but return to the first state at night — you would insure your car in the state where you live. However, in some cases, such as having a second vehicle at your workplace, you will most likely need two car insurance policies.

More Than One House with Vehicles

If you have multiple houses and have vehicles at all of them, you will need a separate policy for each car. However, there’s an exception for people who spend winter months in a warm-weather state but move back during the summer. This exception is called the “snowbird exception.” In this case, it’s common to cancel your policy for the “summer” state when you move to the “winter” state and do the reverse when you move back. This activity is called rewriting your policy for a different state and is a fairly standard procedure.

College Students

For students attending college in another state, it’s permissible to remain on your parent’s car insurance policy, provided that you remain a member of their household. However, if you move out permanently and live independently, you must get your own car insurance policy.

Active Duty Military

In the case of active military personnel, the driver must declare a state of legal residence, i.e., where you return to live after your military service ends. Any vehicle you own at that residence should be insured for that state, regardless of where you are deployed.

What If Your Car is Insured in the Wrong State?

So what happens if your car is insured in the wrong state and you get pulled over — or worse, get in an accident? Are the cost of your car repairs still covered?

Some drivers will attempt to game the system by having car insurance in another state where the benefits are better or the premiums lower. Another dodge some people try is to list someone else’s address — perhaps a friend’s or family member’s — as their own address in the other state. Sometimes people will list a lower-risk area as their address if they happen to live in a city or state with higher crime or vandalism rates.

Penalties

There’s a great reason not to do any of these things — they’re considered insurance fraud. Most likely, your claim will be denied out of hand, which may end up being the least of your problems. On the worse end of things, you could have your auto insurance canceled, and if you can find another company to insure you, a record of having lied on a car insurance claim will make your premiums skyrocket. There’s also the matter of criminal penalties — while it’s not common for people to see jail or probation time for misdemeanor insurance fraud, jail sentences can range up to five years, and fines can range up to $15,000. You may also end up getting your license or registration suspended, which will cost you even more money and time to get reinstated. 

In short, fibbing to your auto insurance company to save money on a second policy is a precarious proposition. In the long run, the cheaper option will be to look around for better and more affordable car insurance quotes in the other state.

When people move to another state, it’s not unheard of to forget to change your insurance to your new residence — but you need to take care of that as soon as possible. If you happen to get in a vehicular accident or make a claim and your insurance company finds out you live in another state where you’re not insured, your claim will likely be denied out of hand. Most states give drivers between 30 and 60 days to change their registration and insurance. However, a few states give as little as ten days and others as much as 90 days.

The Bottom Line About Car Insurance in Two States

Unfortunately, insurance companies don’t offer a “multi-state” policy covering a single vehicle in multiple states. So instead, you’ll most likely be stuck with having to insure the car separately in both states if your time is split evenly between them. It would be best to use caution and not attempt to buy two policies to insure the exact same vehicle because one or both policies may be canceled.

Keeping your car insurance organized when you split your time between states can be complicated — but it’s unlikely you’re in a situation your insurance company hasn’t seen before. The soundest course of action is to talk to your insurer and figure out what’s suitable for your needs.

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