Shemeeka Davis, 40, is charged with murder, torture and child abuse in connection with the Sept. 2, 2008, death of her 15-year-old niece Jazzmin Davis.
She is also charged with abusing and torturing Jazzmin's twin brother, who is still alive.
Davis is accused of beating the children with belts, electrical cords and a wooden closet rod. She also allegedly burned them with a hot iron and frequently kept them locked in their room or in the closet inside their room for long periods of time, forcing them to go to the bathroom on the floor, according to testimony at a preliminary hearing last June.
Jazzmin and her brother were born in San Francisco and placed in Davis' care as infants. Davis was granted legal guardianship of the children six days before Jazzmin's death, witnesses testified.
Davis' plea today is in addition to her original not guilty plea.
Contra Costa County Superior Court Judge Brian Haynes appointed two doctors to evaluate Davis. Their reports are due April 6.
In order for Davis to be found not guilty by reason of insanity, she has to be diagnosed with a mental disease or defect that caused her to either not know or understand the nature of the acts she is accused of committing or that made her unable to understand that what she was doing was legally and morally wrong.
If she is found insane, she could be committed to a state mental hospital for life.
However, if doctors determine that her sanity has been restored and she is no longer a danger to society, she could be released in as little as 180 days.
"It's clear from the evidence that she was insane," Davis' attorney Betty Barker said outside the courtroom.
A trial date has been set for May 9, but Barker said it is possible that Davis will be found insane and there will be no trial.
The San Francisco Human Services Agency, which was in charge of overseeing Davis' care of the two children, has agreed to a $4 million settlement with Jazzmin's brother.
A settlement with the Antioch Unified School District is still pending.