What is the New Car Insurance Grace Period in Colorado?

Colorado allows insurance companies to set their own grace periods to add a new car to an existing insurance policy—typically it’s 30 days. Learn more here.
Written by Pat Roache
Reviewed by Jessa Claeys
grace period
to add a new vehicle to a preexisting auto insurance policy in
is two to 30 days, depending on your insurance company’s policy and the type of coverage you need. If you do not have an existing policy, you’ll need to buy
car insurance
before you drive your new car off the lot.

Is there a car insurance grace period for new cars in Colorado?

Technically yes, but it’s up to your insurance provider. Colorado law does not set any restrictions or regulations on grace periods for adding a new car to an existing car insurance policy. Your insurance agent can give you the most accurate information on your provider’s grace period policy.
Car insurance grace periods determine how long you can drive a new vehicle before adding it to an existing car insurance policy. These can last anywhere from two to 30 days—if your insurance company offers one at all.
During this time, your insurance company will extend car insurance coverage to a new uninsured motor vehicle in good faith, but you have to add your new car to your policy by the end of the grace period.
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When do you need to buy car insurance in Colorado?

If you don’t have any car insurance at all when you purchase a new car, you’ll need to purchase a new policy before you leave the dealership. You only need a little information to
get car insurance before buying a car
—like the vehicle identification number (VIN) and your driver’s license. In most cases, you can set up
same-day auto insurance
right before you sign the final paperwork to purchase the car.
However, you may have a little extra time to buy new car insurance if you already have insurance coverage for an old car in the same state.
Most insurance providers give you seven to 30 days to add a new vehicle to your policy if you only need
liability coverage
. You’ll still need to provide
proof of insurance
when you purchase your car, but it doesn’t necessarily need to include the new vehicle yet.
The grace period typically reduces to two to four days if you need full coverage for your new car. Many lenders require full-coverage policies—which include
collision coverage
in addition to Colorado’s minimum requirements for liability insurance. These types of insurance are riskier for your insurance company to extend in good faith, hence the shorter timeframe to add the car to your policy.

What are the insurance requirements?

Colorado car insurance laws
require you to carry car insurance that includes at least the following amounts of liability coverage for each insured vehicle:
You’ll need to show proof of insurance that meets these minimum requirements whenever you purchase a new vehicle, as well as if you’re ever pulled over or involved in a car accident.
Colorado is an at-fault state, meaning these minimum coverage limits apply to damages that you may cause other drivers in an accident. It’s up to you if you want to buy additional types of coverage that protect you and your vehicle—like
uninsured/underinsured motorist coverage
personal injury protection (PIP)
, collision coverage, and so on.

Penalties if you drive without auto insurance in Colorado

There are two major penalties to consider when driving uninsured: penalties with the state and penalties with your insurance company.
Colorado imposes stiff penalties for
driving with no car insurance
, including the following:
  • Minimum fines of $500
  • License suspension until you submit proof of insurance to the DMV or court
  • Up to 40 hours of community service
And that’s only for the first offense! You’ll also get four points added to your license, and those
driver violation points will raise your insurance rates
for as long as they stay on your record.
If you fail to add a new car to your policy before the end of your insurance company’s grace period, you’ll almost certainly be facing an
insurance lapse
, as well. Even if you don’t get penalized by the state, you’ll face
high-risk auto insurance rates
that are much more expensive than the average premium.
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No. Grace periods vary from provider to provider. Some insurance policies don’t offer a grace period at all. Others tend to last seven to 30 days for liability-only coverage and as little as two to four days for full coverage.
Yes. Unless you are buying from a private seller, you will have to show proof of insurance to your lender and/or dealership before driving off with a new car. You don’t necessarily need to show proof of insurance for the new vehicle specifically, but only if your current insurance policy includes a grace period for new car purchases.
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