Insuring Your New Car In California: Time Limit?

In California, you are required to have proof of insurance for any vehicle that is in use. This can be in the form of a physical insurance card or a digital one displayed on your phone. The state has a new-car insurance grace period of 30 days, which is how long you have after purchasing a vehicle to get a car insurance policy for it and provide proof of insurance to the California DMV. If you already have an active car insurance policy, the grace period to add your new vehicle to this policy is up to 45 days.

California's new car insurance grace period

In California, you are required to have proof of insurance any time your vehicle is in use. This can be in the form of a physical insurance card or a digital one displayed on your phone. The state mandates that you have a minimum of $15,000 per person and $30,000 per accident in bodily injury liability insurance, and $5,000 in property damage liability coverage.

California has a new-car insurance grace period of 30 days in most cases. This is the amount of time you have after purchasing a vehicle to get a car insurance policy for it and provide proof of insurance to the California DMV. If you already have an active car insurance policy, the grace period to add your new vehicle to this policy is up to 45 days.

The new-car grace period is how long you have after buying a vehicle to get insurance coverage for it. During this time, your insurance coverage will be the best available on your policy. So, if you have several vehicles on the policy, but at least one has comprehensive and collision coverage, that full coverage would be extended to your new car.

If you don't have an active car insurance policy, the grace period will not apply. In this case, you'll need to shop for car insurance and get a new insurance policy for your vehicle before driving it.

Proof of insurance requirements

In California, vehicle owners need to show proof of insurance (or another form of "financial responsibility") to register a vehicle. This proof of insurance must be carried in the vehicle at all times and provided when requested by law enforcement, when renewing vehicle registration, or when the vehicle is involved in a traffic collision.

California allows a new car insurance grace period of 30 days, which is how long you have after purchasing a vehicle to buy insurance for that car and provide proof of active insurance coverage to the California DMV. If you already have an auto insurance policy in place, you have up to 45 days to either add your car to that policy or cancel it and get a new policy for your car.

It is important to note that this grace period does not protect you in the event of an accident. If you are caught driving without insurance during the grace period and are involved in an accident, you could be held personally liable for any associated costs.

California accepts both physical and digital proof of insurance. Digital proof can be shown through a smartphone app or by pulling up official insurance documentation on a phone or other devices.

The minimum liability insurance requirements in California are as follows:

• $15,000 for injury/death to one person
• $30,000 for injury/death to more than one person
• $5,000 for damage to property

These requirements will increase effective January 1, 2025, as follows:

• $30,000 for injury/death to one person
• $60,000 for injury/death to more than one person
• $15,000 for damage to property

In addition to purchasing a car insurance policy, there are a few other methods to comply with California's "financial responsibility" requirements:

• Make a cash deposit of $35,000 with the California Department of Motor Vehicles (DMV).
• Obtain a self-insurance certificate from the California DMV.
• Purchase a $35,000 surety bond from an issuer licensed to do business in California.

Penalties for driving without insurance

In California, driving without insurance is considered an infraction and is punishable by law. The penalties for driving without insurance vary depending on whether it is a first-time or repeat offense, but they can range from a $100 to $500 fine, towing of the vehicle, and suspension of the driver's license.

First-Time Offense

If you are caught driving without insurance in California for the first time, you can expect a fine ranging from $100 to $200, plus penalty assessments that may increase the total amount to around $450 after extra fees and assessments. Vehicle impoundment is also a possibility for first-time offenders.

Repeat Offenses

For a second offense, the fines increase to between $200 and $500, with penalty assessments potentially raising this to between $520 and $1,300. More severe penalties, such as vehicle impoundment and suspension of driving privileges for up to four years, can also be imposed, especially for repeat offenders.

Increased Insurance Costs

In addition to the immediate penalties, driving without insurance in California can lead to a significant increase in your auto insurance premiums once you obtain coverage. Insurance companies consider drivers with a history of driving without insurance to be high-risk, which results in higher insurance rates.

License Suspension and Fines

If you are involved in a car accident in California and cannot show proof of insurance, the state may suspend your driver's license for one year and impose a fine of up to $200 for a first offense and up to $500 for subsequent offenses. These fines can increase significantly when additional penalties and fees are included.

Vehicle Impoundment

Your vehicle may be impounded, and you will be responsible for any towing and storage fees, regardless of whether it is your first or subsequent offense.

SR-22 Requirement

If you are involved in an accident without insurance, you may be required to obtain an SR-22 form, which is a certificate of financial responsibility. This requirement typically lasts for three years and indicates to the DMV and insurers that you are a high-risk driver.

Personal Liability for Damages and Medical Expenses

Without insurance, you may be held personally liable for any damages and medical expenses resulting from the accident. This means that you could be responsible for covering these costs out of pocket, which can amount to tens of thousands of dollars or more.

Limitations on Recovering Non-Economic Damages

In California, if you are uninsured and get into an accident, you may face limitations on recovering non-economic damages like pain and suffering, even if the accident was not your fault. However, there are exceptions to this rule, such as if the at-fault driver is under the influence of drugs or alcohol.

Ticket for Driving Without Adequate Coverage

Even if you are not at fault for the accident, you can still receive a ticket for driving without insurance. This violation can result in a substantial fine when additional penalties and fees are considered.

Alternative types of financial responsibility

In California, drivers are required to have a minimum of $15,000 per person and $30,000 per accident in bodily injury liability insurance, as well as a $5,000 minimum in property damage liability coverage. However, drivers can choose to forgo the state's minimum insurance requirements if they use an approved "alternate type of financial responsibility". This essentially means they can prove they have the ability to pay for any damage they cause in a car accident through other means. Here are some alternative types of financial responsibility:

Cash Deposit

Drivers can choose to make a cash deposit of $35,000 in a savings account and put the account information on file with the DMV. If the driver is at fault in a car accident, the state will draw directly from this account to pay for any damages. It is important to note that the balance of the account should not fall below $35,000, otherwise, the driver will be in violation of the law, similar to letting an insurance policy lapse.

Certificate of Self-Insurance from the DMV

Individuals who have more than 25 vehicles registered in their name can obtain a certificate of self-insurance from the DMV. This certifies that they can cover medical bills, repair costs, property damage, and bodily injury liability costs. To qualify for self-insurance, individuals must provide proof to the state that they have the financial means to pay for any potential costs arising from an at-fault accident.

You can purchase a $35,000 surety bond that guarantees you will cover bodily injury and property damage expenses in the event of an at-fault accident. If you are unable to pay these costs, the surety company will cover them initially and then seek repayment from you later. The California Department of Insurance provides a list of licensed companies that offer surety bonds for drivers who prefer this type of coverage over traditional liability insurance.

These alternative types of financial responsibility are typically suitable for individuals who own a lot of property, such as a fleet of vehicles, or have a significant amount of money and can afford to pay for damages out-of-pocket. However, for most drivers, purchasing traditional car insurance is a more feasible and practical option.

Adding a new vehicle to an existing policy

In California, you have 30 days to get insurance coverage for a new vehicle and provide proof of that coverage to the California DMV. However, if you already have an existing policy, you have a grace period of up to 45 days to add your new vehicle to that policy. This grace period is only for vehicle registration purposes, and you must have an insurance policy in place to avoid getting a ticket if you are pulled over or to pay out of pocket for damage in an at-fault accident.

It is important to note that not all insurance companies will extend coverage if you are adding a new vehicle to your policy without removing an existing one. For example, if you are going from two to three cars, your insurer may not cover the third car under your existing policy. Therefore, it is essential to contact your insurance company as soon as possible to let them know about any changes to your policy and confirm that you qualify for a grace period.

To add a new vehicle to your existing policy, you will typically need to provide the following information to your insurance carrier:

• Vehicle Identification Number (VIN)
• Registered owner's information
• Vehicle safety features
• Type of coverage you want
• Usage estimates
• Leasing information, if applicable

Frequently asked questions