Understanding Car Insurance for Active-Duty Military Members and Veterans
If you are an active member of the military or a veteran, companies want your business — and with good reason. There are approximately 1.3 million active-duty military members, more than 800,000 reserve forces members and 18.8 million Armed Services veterans currently living in the U.S. and overseas. Veterans represent 7% of the total population. Altogether, that’s a lot of buying power. The army is the largest U.S. military service, followed by the navy, air force, marine corps, and coast guard. The space force became its own branch of the armed services in late 2019 and is still developing.
While service members are away, they may leave behind their vehicles, motorcycles and other motorized equipment. It's essential to make sure you have the right car insurance coverage that fits your needs.
The Basics of Auto Insurance and Military Service
Military members have unique car insurance needs that apply to specific circumstances. Regardless of where you live or are stationed, military car insurance laws must be adhered to and meet or exceed the minimum requirements of the state you are temporarily or permanently residing in. Active military members and their families face a number of considerations when it comes to choosing auto insurance coverage. Not only do they frequently move from state to state, but they occasionally move overseas for one to three years or deploy to combat zones.
Minimum Insurance Requirements for Active-Duty Military Members
Members of the military have the same auto insurance coverage requirements as the general public. With several providers available, you can find best insurance options for military members and veterans. Generally, a member of the military will need to meet the minimum liability car insurance requirements for their state. If a car is being financed, they will also need to carry collision and comprehensive coverage in accordance with the terms of a financing or lease agreement.
Insuring Your Car in Another State
Insurance premiums can vary substantially depending on location, so you’ll need to update your coverage every time you move to another state. You may have to adjust your liability coverage to conform to state minimums. "Don't assume that your current carrier is going to be the best deal in the new state," advises Douglas Heller, an insurance industry expert with the Consumer Federation of America. "You should shop around."
Military Car Insurance for a Temporary Move
If you're driving your car to another state for a temporary duty trip and not changing your permanent duty station or home of record, your military car insurance typically doesn't require changes. Some states have special provisions for military members who want to keep coverage in place from their home address. If you will be gone for a longer period, be sure to check for affordable car insurance options.
Military Car Insurance for a Long-Term Move
If you're making a permanent change of station move to another state, your out-of-state military car insurance must conform to laws in the new state. At a minimum, you will need to ensure you carry your state’s required liability insurance on your car. "Make every effort you can to maintain seamless coverage," advises Heller.
California has protections against charging extra for a lapse in coverage. But seamless coverage will help you avoid the "break-in-coverage penalty." Many people will transfer to a new state and say, "'Well, it’s going to be a week or so until I'm set up and driving again in the new state, so I'll just get coverage then.'" But that mistake can cost you hundreds of dollars, Heller warns.
Ask for a refund on your unearned premium. When you cancel your old policy, ask your carrier or agent for a refund of the unearned premium. This is the portion of your premium payments the insurance company received but didn't earn. For example, if you bought a six-month policy from your insurance company and paid a six-month premium in advance, and you move after two months and need to cancel the policy, your insurance company should refund you for four months' worth of premiums.
Q&A: Common Car Insurance Questions for Military Members and Families
Ways to Manage Your Car Insurance During an Overseas Deployment
The question "Does the military pay for car insurance?" usually comes up when someone gets new orders or is transferred. The military does not pay for car insurance. You’re expected to pay for this expense on your own. But prior to an overseas deployment or an extended period of sea duty, active-duty military personnel have some choices regarding their vehicle and coverage. Below are a few key options:
1. Suspend Your Policy
Ask your carrier if you can "suspend" your policy rather than cancel it. You may be able to pay a significantly reduced rate, and you will still be covered if your vehicle is damaged or destroyed while in storage. Generally, suspending your policy is advisable to canceling your coverage, since it will help you avoid break-in-coverage penalties. Alternatively, you may want to retain comprehensive coverage to protect you against theft, flood damage or hail damage.
You can get coverage from any carrier, but USAA, GEICO and Armed Forces Insurance are likely to have the most institutional experience, specifically with deployment-related issues. Before you leave, ask your current carrier about options.
2. Cancel Your Coverage
If you’re single or none of your dependents drive, you may want to place your vehicle in storage while you are deployed. If doing so, you can cancel your coverage. Canceling coverage altogether can be a wise option financially, but some carriers will penalize you for any lapses or often charge you a higher rate if you have not maintained continuous coverage. This penalty can cost you hundreds of dollars over your policy term.
Your carrier may ask you for a letter from your commanding officer or other unit representative verifying that you are not expected to be driving a civilian vehicle in the U.S. during your deployment. "It's important to send a letter to your carrier or agent explaining why you are canceling your insurance coverage," says Heller. "When you return, ask for an exception to any price increase normally imposed for a break in coverage."
3. Leave Your Car With Family
Consider leaving your car with your spouse or another family member to drive while you’re gone. However, it may make sense to remove yourself (or your deployed family member) from your policy. This course of action has three advantages:
- It may lower your premium.
- Your family members and other authorized individuals can still use the car.
- It helps avoid lapsed coverage penalties
Be sure to add your deployed family member back on the plan if he or she comes back on leave, advises Heller. If you anticipate a significant reduction in the number of miles driven while your loved one is away, be sure to say so — you may get a discount as a result.
4. Bring Your Car With You
Active-duty personnel who make a permanent change of station overseas may be able to bring their vehicle with them. While doing so may not be helpful if you're going to Afghanistan or doing six months at sea on a submarine, it may make sense if you're making a PCS move to someplace like Germany or Italy.
Shipping Your Privately Owned Vehicle (POV)
If you’re driving your POV to the new duty station, you don’t have to worry about shipping damage. If you have an accident or other claim along the way, just send notice that you're transporting your vehicle ahead of time and file your claim through your regular auto insurance carrier.
However, if you're using a military relocation services provider to ship your vehicle, take several photographs to document your vehicle's current condition prior to releasing it to the provider. You'll do a joint inspection with an agent from the shipping company when you drop off your car, and you'll sign a DD788 inspection form.
Make sure to have insurance in hand when you pick up your POV at the vehicle processing center near your new duty station, and check your car over carefully before you leave the processing center. If your vehicle has been damaged during transportation, you'll have photos to document your claim.
Damage En Route to a Privately Owned Vehicle (POV)
If your car was shipped via an official military relocation service provider and is damaged en route, you have three ways to pursue a claim after gathering the necessary information.
Pursue your claim on-site
The Vehicle Processing Center closest to your new duty station should have a place to file a claim. The VPC staff will use a standard repair guide to calculate the number of staff hours required to repair your vehicle and multiply it by an estimated local labor rate. They may cut you a check on the spot to get your car repaired.
File a claim with the International Auto Logistics claims office
IAL can be contacted at 855-389-9499, and you can file your claim by mail or online at firstname.lastname@example.org. Note that you can make vehicle loss/damage claims in addition to inconvenience claims.
File a claim with the Military Claims Office
If you deny the settlement offered by IAL, proceed to file a claim through the Military Claims Office. You can file both a loss and damage report, and you will be required to have an estimate of repairs, which you will ultimately be reimbursed for.
What to Expect When Shipping Vehicles
The military will only transport one vehicle at government expense. If you want to move additional cars to your new duty station, you'll need to have them transported at your expense and line up your own insurance.
You should contact your carrier about insurance options and coverage while your vehicle is being shipped. You may be able to rely on your regular insurance carrier for coverage, but getting coverage via your shipper or using a marine insurance policy may help you avoid having to pay a deductible in the event your vehicle is damaged or destroyed.
You should also speak to the company shipping your personal vehicle and ask the following questions: Are their insurance limits sufficient to replace your car if it’s totaled en route? Can you purchase additional coverage?
Reinstating Your Insurance After a Deployment
When a deployment or move outside the contiguous United States has taken you away from your vehicle for an extended period, be sure to obtain car insurance before you return. Doing so can lend you immediate protection and ensure you are driving legally as soon as you’re on the road. Below are a few considerations when reinstating your insurance:
- Take out a policy reflecting your home of record. If you're returning to a state other than where you left your POV, you may want to make sure your home of record is accurate. Home of record is typically the state from which someone joined the military.
- Carry proof of insurance. If your vehicle is garaged at a civilian storage facility or with a friend, you probably won’t need to show insurance. But if your vehicle is at an official military vehicle processing center, you’ll have to show proof of insurance to pick it up.
- Keep documents up to date. If your car registration has expired while your vehicle was in storage, you should renew it as quickly as possible. In addition, be sure to carry a copy of your car’s title and insurance in your glove compartment, and make sure your vehicle has been inspected.
Assess Previous Claims Experiences
Always make sure your policy is with an insurance company that stands by its promises to settle your claim quickly and fairly, up to the limits of your deductible. Whether you choose an insurer which caters to military members or serves the general public, you’ll be glad you did. Check whether an insurer has good reviews and if other people have said something positive about their experiences. A company’s financial rating is equally important. A robust financial stability score means a company has substantial assets to pay out its obligations.
Beware the "Patriot Penalty"
The "patriot penalty" is a penalty over and above any rate increase attributable to a lapse in coverage. Carriers frequently charge a higher rate to customers reinstating coverage after a lapse. Some companies with a history of charging service members returning from a deployment more than they charge identical applicants not returning from deployments have caused outrage in the past.
"It is absolutely outrageous and unacceptable to allow any insurer to charge a higher premium to members of the military solely because they didn’t maintain insurance coverage when they were sent abroad to serve," Heller wrote in a letter to insurance commissioners on behalf of the Consumer Federation of America. "This penalty for service is revolting and should be barred without delay."
Car Insurance Discounts for Service Members and Veterans
Some car insurance carriers and other companies will offer a discount to active-duty service members and veterans. However, there are many different factors that go into car insurance pricing, and different businesses assess and price risk in various ways. It is important to compare rates with a variety of insurers. The level of discounts varies widely, so review your current policy to make sure you’re getting the best car insurance for your needs.
Both USAA and GEICO court the military and veteran market. Other companies may have arranged affinity discounts for members of veterans' organizations like Veterans of Foreign Wars, the American Legion or the Reserve Officers Association. Once you're out of the military and not being asked to move or deploy, additional military-specific services provided by insurers become less important.
Rather than focusing on which company offers a discount specifically for veterans, it's better to find the best deal overall. A carrier which does not offer any discount may actually provide a much better deal overall.
Expert Advice on Car Insurance Coverage
- What car insurance coverage do you recommend for active-duty or deployed military members? Does that change for veterans?
- I now require adaptive equipment in my car after military service. What do I need to know/should I do to make sure I'm covered by car insurance?
Retired Army Combat Veteran and Financial Speaker and Coach at Marilyn West LLC
Senior Manager of Customer Experience at Metromile
Resources for Military Members and Veterans
A variety of resources can help you find relevant information about car insurance and other relevant topics for military members, veterans and their families.
- Military OneSource: Created by the Department of Defense to provide confidential help, trusted information and resources to service members and their families, this resource includes financial and legal help, education, employment, parenting and relationship support and counseling for children struggling with military life.
- USA.Gov: A resource for military benefits and programs, including resources for spouses. Find out more about health care, housing, education, job training and other military assistance programs.
- TriCARE: Military members, veterans and their families can access the TriCARE website to learn about their health insurance plan and options. Manage prescriptions, get proof of insurance, make appointments and find out what’s covered on the TriCare website.
- HealthCare.gov: For veterans not covered by TriCARE or another health care program, this website allows you to enroll in a plan through the Marketplace. Learn about your program options, what you qualify for and more.
- U.S. Department of Veterans Affairs: Veterans can use the VA website to get federal benefits, apply for healthcare, obtain caregiver support and find out their rights and responsibilities. You can also download forms and publications and request prescription refills.
- Federal Voting Assistance Program: No matter where you are in the world, your vote still counts. Use the FVAP website to request your ballot, learn about election dates and deadlines in your state, find an election office, check your ballot status and more.
- National Association of Insurance Commissioners: It can be hard to keep each state’s requirements straight. The NAIC offers a directory which can help you locate necessary contacts and obtain more information.
- Military Health System: Learn about the Military Health System, including how to gain access, find the best cost-effective treatment, learn about diagnoses, get treated, optimize your fitness and more.
About the Author
- Council on Foreign Relations. "Demographics of the U.S. Military." Accessed October 21, 2021.
- Department of Defense. "PCS and Military Moves." Accessed October 21, 2021.
- Massachusetts Registry of Motor Vehicles. "Registration rules for military members." Accessed October 19, 2021.
- Pew Research. "The Changing Face of America’s Veteran Population." Accessed October 21, 2021.
- U.S. Army. "State of Residence vs Home of Record." Accessed October 21, 2021.