How To Set up Insurance With an Out-Of-State Car Registration in California

Dirt Legal is the household name in out-of-state car registration, with the best Montana LLC program out there. But we also know that there are a few lingering questions out there about just how exactly it works, what vehicles can be registered, and what states work for out-of-state registration. 

First, make sure to check out our entire blog archives; the odds are pretty good that if there is a question out there, we have probably talked about it. However, one topic that we haven’t talked about much is the insurance process. 

This is the first in a short series of articles about setting up insurance in your domicile state while registering out of state. In this installment, it’s all about California. 

First Steps: Which State Should I Register In?

Okay, so the first question that most people ask is: where should I register my car in? This is a reasonable question to ask. You have a couple of options with Dirt Legal, depending on the application. Our two primary registration locations are Montana and South Dakota, but we focus on Montana. Why?

Read on. 

A Montana LLC Is Your Best Bet

If you are living out of state, especially in California, which has a snitch hotline, you want a service that provides legitimate proof of out-of-state residency. Make sure to read up on our article that dealt in-depth with residency versus domicile to understand the key differences. 

Our Montana vehicle registration is the top cover. You need to do a few things:

1. Get out of emissions inspections and state inspections forever. 

2. Save potentially thousands of dollars of sales tax (Montana has zero sales tax)

3. The mandatory Montana LLC proves you have legal residence in Montana, even if your domicile is in California. 

A Montana LLC owns the vehicle; no ifs or buts about it. We get a lot of questions about this, and yes, it has been challenged in court many times. But at the end of the day, the LLC is absolutely the legal owner of the vehicle, and the LLC is in Montana, which means that the owner is a Montana.  

How Do You Do Insurance for Out-of-State Registration in Cali?

Okay, we get this question, and we totally get where it is coming from. 

The cold, hard truth is simple: if you go through your local Big-Box insurance company agent and tell them what you are doing or are planning on doing, they very well might dump you. 

Think about it from their perspective: insurance companies are built around strong pillars of risk avoidance. The idea of having one of their insured owners having a vehicle registered and titled in Montana but their domicile address in California will almost certainly make them feel uneasy, even if there is nothing actually illegal about it (there isn’t).

We are not lawyers or legal experts, but one thing we can tell you for sure is this: be completely honest with your insurance provider about your intentions. Are you registering an OHV for street-legal use in your home state? You better be honest about it. Registering your car in California through a Montana LLC? Tell them. 

What you do not want to happen is to get in a wreck and report it to your insurance provider, only to have them refuse the claim and dump you because you didn’t tell them what you were doing. 

Yes, it has happened. 

Domicile Vs. Residence

Before proceeding further, let's clarify the difference between domicile and residence. The aim of the Montana LLC is to establish a residence in Montana for asset protection purposes. Residency is where a person chooses to live, while domicile is considered their permanent home.

Your legal domicile remains where you currently live or wherever you relocate to. It's important to understand the distinction between the two, and our services only facilitate the establishment of residence. Remember that while Montana has its own regulations, your domicile location may not align with these. However, it’s not all that likely that anyone is looking for your plates. 

The California Snitch Line

Now, let’s be completely transparent here: there is nothing wrong with what you are doing when you decide to register your California car through a Montana LLC; the State of California will not be thrilled. Obviously, with over ten million passenger vehicles registered in the state, there is no way to monitor all of them. So, California came up with a snitch hotline for their residents to report ‘violators.’ 

There isn’t any workaround for this; if someone has beef with you or just happens to be a rule follower and calls you in, you will have to answer for it. We don’t like it either, but it is how it is. The best thing for you to do is prepare your statement, learn to be polite and courteous if or when you get pulled over. Save your arguments for a formal day in court. 

If I Get In an Accident, What Happens Since My Tag Is Out-of-State? 

Again, this all depends on your insurance provider and agent. We highly suggest you talk to our friends over at Select Insurance Group. Steve Ludwig is extremely experienced with the services we provide, so you can rest assured you will have no trouble at all insuring your out-of-state registered vehicle or a street-legal OHV. 

This is not a registration issue, this is an insurance provider issue. It is entirely in the realm of your insurance what happens. If you are insured with an agency who knows what you are doing and is fine with it, then it is no different than getting in an accident in a vehicle tagged in-state. 

If your agency is not aware of what you are doing and finds out after the accident and in the claim…well, you’re better off not finding out this way. 

Final Thoughts

Out-of-state vehicle registration is nothing new. We have helped almost 30,000 customers get their vehicles titled and/or tagged with an out-of-state title or registration. But insurance and registration are two completely different animals. Even though it is completely legal to use our services, that doesn’t mean your insurance provider will play ball. 

Be honest with them about what you’re doing. If they are fine with it, get it in writing. If they aren’t fine with it, check out our preferred insurance providers and give them a call!