Question: Does my auto insurance policy follow my car if I drive out of state? Don't different states have different requirements? I’m looking to go on a road trip this summer with friends and plan on driving through multiple states.
Answer: Most auto insurance does indeed travel along with you when you operate your vehicle out of state.
You're correct that states vary on what is required for auto insurance. If you have bought the cheapest insurance you can find -- the state minimum liability coverages -- your state's requirements may be lower than those in the states you'll be traveling through.
But most car insurance companies include what is referred to as a broadening clause in their policies. This clause authorizes your liability limits to be increased and conform to the minimum limits of the state in which you’re driving in.
For example, if you have a California car insurance policy with minimum limits of 15/30/5 and caused an accident in Oregon, then if your policy has the broadening clause (and most do) your limits would automatically raise to meet the higher limits of 25/50/20 that Oregon car insurance law requires of its drivers.
Or, if you’re driving in a no-fault state that requires personal injury protection (PIP) and you don’t have it, then typically your insurance company will afford you that coverage if you were injured in an accident – just for this one lone incident.
Review your policy
Before starting on your road trip, we’d advise you to review your policy to make certain it has the broadening clause. Look for any exclusions or restrictions -- this is especially important if you’ll be going through Michigan, since some policies will exclude Michigan from the broadening clause due to its high, and unique, coverage limits.
Also, if you have higher limits, make sure that they will remain at those higher levels even out of state or if others are driving your car. We always recommend that car owners obtain higher liability limits (such as 100/300/50) when you have savings and assets to protect.
Since friends will be on your road trip with you, we assume they’ll share driving. Insurance follows a car, not driver, so it's important to make certain that your policy will cover other drivers to operate your vehicle. If it doesn’t, you could be left paying out personally if your friend crashes.
If your road trip will take you out of the country, double-check that your coverage will follow you there. Most policies will include coverage for Canada, but not Mexico. There are a few insurers that offer optional coverage for Mexico, but there may be limitations and possible exclusions or exceptions you need to be aware of.
If find that your current policy doesn’t cover you out of state like you need, quickly shop around for one that will. You may end up saving money in the process. Just make sure the new policy is in effect before you leave on your trip and that you don't have a gap in between your old and new policy -- even a one-day lapse can get you penalties in some states.