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Insuring a Salvage Title Car

Updated
Christy Bieber
By: Christy Bieber

Our Insurance Expert

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Insuring a salvage title car isn't possible because the vehicle is not considered driveable. However, it is possible to get auto insurance for a car with a rebuilt salvage title. This guide will explain what a salvage title is, why it can't be insured, and what to know about getting coverage for a rebuilt vehicle.

What is a salvage title?

A salvage title is a type of title issued to a vehicle. This type of title is issued when the car has sustained extensive damage in a car accident or from other causes, such as a hurricane or fire.

Different states may define what constitutes a salvage vehicle differently.

For example, a car may get a salvage title if an insurance company has acquired ownership of it after declaring it a "total loss." In those situations, the insurer opts to provide the owner with a check for the vehicle's market value rather than pay for repairs. The insurer can take possession of the car with a salvage title. Or a car may get a salvage title if repairs for the damage to the vehicle would cost more than 80% of the vehicle's value.

When a vehicle has a salvage title, it generally cannot be driven legally on public roads. As a result, insuring a salvage title car typically is not possible. Auto insurers will not provide insurance coverage for a car that cannot legally be driven.

What is the difference between rebuilt and salvage titles?

Cars with a salvage title cannot be driven. However, cars with salvage titles can sometimes be rebuilt. Once they have been rebuilt, they can become eligible to be out on the road again.

Once the car has been substantially rebuilt, the salvage title does not disappear from its record. The car will usually have a "rebuilt" title going forward. A rebuilt title is designed to ensure future owners know of its accident or damage history.

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Can you insure a car with a rebuilt or salvage title?

As mentioned above, it is not possible to get insurance for a car with a salvage title. But it is possible to get insurance for a vehicle with a rebuilt title. If the vehicle has been repaired and is street legal, most insurers will offer at least some coverage for it.

Insurers will check the Vehicle Identification Number (VIN number) of vehicles they insure. This will reveal that the car has a rebuilt title. An insurer may refuse to offer full coverage auto insurance for a car with a rebuilt title. This is because it can be difficult to determine what damage happened due to a new covered incident versus the prior damage sustained before the car was rebuilt.

If a full coverage policy is issued, the payout may be lower in the event the vehicle is declared a total loss in the future. Rebuilt vehicles are not worth as much as cars that don't have a history of substantial damage. As a result, insurers would pay out less for the rebuilt vehicle in the event of a total loss.

It's important to be aware of that when purchasing auto insurance coverage.

How to get insurance for a rebuilt salvage title car

To get insurance for a rebuilt salvage title car, these are the steps to take.

1. Decide what kind of coverage is desired

Figuring out which type of car insurance you need can be complicated -- especially for a vehicle with a salvage title. Obviously, every policyholder needs to comply with their state's minimum coverage requirements, which usually include liability insurance.

Getting other kinds of coverage, such as collision coverage, may not make sense for a rebuilt title car. That's because of the lower value of a rebuilt salvage title car. Consider what the car is worth versus the premium costs for additional coverage to decide what insurance makes sense.

2. Shop around with different insurance carriers

Some insurers impose a surcharge of up to 20% for a car with a rebuilt salvage title as compared to the price for a vehicle with clean title. This can increase the cost of auto insurance. Some insurers also limit what kinds of coverage is available. For example, it isn't always possible to buy full coverage insurance for a car with a rebuilt title.

This is why it is so important to shop around and compare all options before buying coverage. With careful research into the best options for auto insurance, policyholders can find the policy they want at an affordable price.

Since insurance for a car with a rebuilt salvage title is a specialized product, it may not be possible to get quotes online from some insurers. This may mean it's necessary to call insurers to compare prices.

3. Get a certified mechanic's statement

Insurers may require a certified mechanic's statement to prove the rebuilt vehicle is in good condition and has been fully repaired to the point where it is street legal and insurable.

4. Provide the original repair estimate

Some insurers will want to know what repairs were made during the rebuild process before insuring a rebuilt vehicle. An original estimate for repairs should summarize the types of damages the vehicle had incurred and can prove to the insurance company that these problems were fixed.

5. Take photos of the vehicle

Photos may also be necessary when getting insurance for a salvage title car that has been rebuilt. These photos can show the condition of the vehicle at the time coverage is purchased. Insurers can use these photos as reference in case future claims are made. It's especially common for insurers to require photos when policyholders with a rebuilt title want full coverage insurance.

Does it cost more to insure a rebuilt title car?

Many things affect the cost of insurance. For example, car insurance rates after an accident the policyholder caused are typically higher. This isn't the case if the policyholder had accident forgiveness insurance.

A rebuilt title is one factor insurers may consider. Some insurance companies impose a surcharge for insuring a salvage title car that has been rebuilt. But not all insurers do. A policyholder's own accident history and driving record can make a bigger impact on premium prices than the type of title the vehicle has.

Which companies offer rebuilt title car insurance?

Several different companies offer rebuilt title car insurance, including these.

Allstate

Allstate provides only liability insurance for cars with a rebuilt salvage title. Full coverage policy options are not available. Allstate offers attractive features, including a large agent network that can help owners of a rebuilt vehicle to understand their insurance options.

Geico

Geico offers the option for policyholders to buy full coverage for a vehicle with a rebuilt salvage title. Geico is also well-known for its affordable premiums. Insuring a salvage title car that has been rebuilt may be more affordable with this insurer for many drivers, compared with some competitor policies.

Progressive

Like Geico, Progressive typically offers full coverage options for a vehicle with a rebuilt title. However, a photo inspection may be required to purchase collision coverage with Progressive insurance. And not all cars with rebuilt titles are guaranteed to qualify for full coverage.

State Farm

State Farm also offers full coverage options for vehicles with rebuilt titles. There may be additional requirements to purchase a policy, including a photo inspection before coverage is issued.

FAQs

  • Salvage cars are hard to insure. In fact, insuring a salvage title car is typically not possible. That's because these vehicles are not allowed to be driven on the roads. When a salvage car is rebuilt, more insurers will offer coverage. The rebuilt salvage vehicle can be driven again. Most insurers provide at least some coverage, including liability protection. Not all insurers offer full coverage, but some do.

  • Some insurers offer full coverage policies for cars with a rebuilt title, but others do not. A driver who wants full coverage on a rebuilt title may be required to complete additional requirements. This could include providing the original repair estimate for the vehicle or submitting to a photo inspection.

  • Insurance companies consider a car a total loss when the cost of repairs are so high it no longer makes sense to fix the vehicle. There are different rules for when a car will be classified as a total loss. For example, a car might be declared a total loss if the cost of repairs exceeds 80% of the vehicle's value. If a car is a total loss, the insurer pays the fair market value to the policyholder and can take title to the car with a salvage title.

  • Most insurers offer coverage for cars with a rebuilt title. Insurers usually offer coverage that fulfills the state's minimum requirements. This can include liability insurance and personal injury protection coverage. Some insurers offer full coverage, including collision coverage that would pay for repairs or replacement of the vehicle if future accidents happen. But not all insurers provide full coverage and many impose additional requirements, such as a photo inspection, in order to provide a full coverage policy.

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