Can I Insure a Car in Another State?

••• Getty Images/Hero Images

Car insurance costs are a major part of car ownership, and some states have higher premiums than others. If you travel out of state often, spend several months in a different state than the one in which your car is insured, or are away from home attending college or university, or are just looking to save money, you may be wondering if you’re able to insure your car in a different state.

Here is everything you need to know:

Why You Can’t Generally Insure Your Vehicle in a Different State

The most obvious reason is that if this were possible, everyone would buy car insurance in the cheapest state and/or the one with the most lax requirements. Even if you have a relative who lives in another state, you still cannot typically be listed on their insurance for the same reason. In very rare cases, some insurance policies will allow insuring a vehicle registered in a different state — but make sure you’re listed as a driver on the policy.

And What Happens If You Do

Insurance companies and state governments really are not the biggest fans of fraud and rate evasion. If you’re caught playing games with your car insurance, there are all sorts of potential consequences: if you’re in an accident, it is very likely that your car insurance company will refuse to pay out an insurance claim. You could have your policy canceled, which in most states, means you will not be allowed to operate your vehicle on the road. And if you are caught doing so anyway, you may have your license suspended or revoked.

How would they catch you, you ask?

Let’s say your car is registered and insured in Florida but you’ve recently moved to New Hampshire. You’re in an accident and file an insurance claim for the cost of repairs. One of the things the insurance claims investigator is going to ask you is, “what were you doing in New Hampshire?”

If you say, “well, I live here now!,” they’re probably not going to be too happy.

It’s really just not worth it.

What Happens If I Commit Insurance Fraud?

Even if your insurance company for some reason does not care and does not press charges, you could still be investigated by your state’s District Attorney’s office and tried for fraud. Your insurance company will almost certainly try to recoup the difference in premiums that you should have been paying on top of that as well.

Here are some frequently questioned scenarios that aren’t so cut and dry:

Car Registered in One State But Insured in Another

Let’s say you have purchased a car for a family member (perhaps your son or daughter who is in college) who lives in one state while you live in another. If you registered the car in your relative’s home state but plan on insuring it in your home state, be careful: you’ll probably need to switch either your insurer or the state in which your car is registered. The same situation generally applies if you’re temporarily working in a different state and living there for a few months. Most car insurance companies require that your car is registered and insured in the same state — and most DMV’s require that the car is registered in the same state as the driver’s current home address.

Some insurers may have special options for out-of-state students which allow them to stay insured in their home state, so you should consult your insurance agent if this is your situation.

Car Owner in One State Car Driver in Another

If you purchased a car for someone in your household, it is probably under the same insurance policy as your car. But if the driver of one car is moving to a different state than you live in, you may be wondering what you need to do. If you’re the sole owner, you may be able to register the car in the state in which the driver lives and list the other driver on the new insurance policy. It is probably more practical to transfer ownership of the vehicle to the driver of the vehicle, though, unless you have a loan or lease on the vehicle.

Snowbirds and Those With Vacation Homes

How I envy your ability to spend your time in year-round warmth! Alas, if you are traveling to and from Florida, you will need to have Florida car insurance if your vehicle is in Florida for more than 90 days per year. Most other states have similar requirements. Yes — this does mean you’ll be dealing with two different insurance agents and policies. But that’s a small price to pay for the life of travel luxury, right? And it’s certainly better than having your car insurance company refuse to pay out any claims or kick you off of the policy due to fraud, right?

If you’re trying to save money and your car is permanently located in your vacation state, there is a potential option of canceling your insurance coverage, surrendering your license plates and canceling your vehicle’s registration during the months when you are not driving your car. However, if your car is damaged, stolen, or ruined while uninsured, you would be out of luck — and this is definitely not an option if your car is being financed by an auto loan.

A better option would be to contact your insurance agent and explain your situation. There are often discounts available for stored cars or low-mileage driving. If your insurance company is a big multi-state company, you might be able to get a discount for having policies in multiple states. If you would rather go with a small provider in your home away from home, ask about vacation home and car insurance bundles to save on both.

Active Military Personnel

If you are traveling a lot as part of your service for the armed forces, you are generally required to declare a state of residence — this is generally your home state, not the state in which you are stationed at any given time.