Moving is never fun. There are boxes to pack, furniture to move, movers to hire (in some cases) and, once you arrive at your new home, items to unpack and rearrange. Not to mention the many other things involved in moving, including setting up new daily routines, finding new grocery stores, and getting settled in to your new place.
But there is yet another unpleasant thing to consider when moving from one state to another: your current insurance company may not do business in your new state of residence. This means that your policies may be rendered invalid, leaving you out of luck should something bad occur. Many people believe that their insurance companies operate everywhere, but that is not the case.
Insurance Laws and Regulations
There are a number of different laws and regulations that insurance companies must follow. These vary widely from state to state, just like how car insurance minimums vary depending on the state that you are. Insurance companies have to be licensed in order to do business in a particular state. They must prove that their brokers are properly licensed and trained, and that their insurance agents are as well. All of this extra training, licensing and paperwork costs money, meaning that many of the smaller insurance companies will decide not to pay the extra expense in order to go through the regulatory process for every state in the country.
State-Based Insurance Companies
State-based insurance companies are those that operate in only one (or a handful) of states. They are smaller, but have the same purpose as larger, national insurance companies. While the costs of their insurance policies are well in line with the national ones, since they are competitors, and the customer service may be better, since you are dealing with a smaller company, the downside is that you may have to switch insurance companies after moving to another state, especially if you choose one that they do not do business in. In some cases, the insurance company may be able to recommend one locally for you to switch to, but in others, you might be on your own.
National Insurance Companies
National insurance companies operate, well, nationally. They have a presence in all (or almost all) of the United States. These companies are the first ones that people think of when they have to name an insurance company, as they are larger and advertise well. If you already have your insurance policies through one of these national companies, then you are in good shape when you move from one state to another – the odds are good that they operate there and all that will change is your address and policy amounts, depending on the place that you have moved to.
It comes as a shock to people that insurance companies, especially smaller ones, do not operate in every single state. You might be used to dealing with a particular insurance agent or agency, but if that company is not licensed in the state that you now live in, it is time to say goodbye and find a new insurance brokerage to go with. If you do not, your coverage will be canceled.
Terry Wood is a writer with USInsuranceNet.com, a site that helps consumers shop for Dallas auto insurance by comparing quotes from local insurance agents.