Can you Insure a Salvage Title Car?

Home » Selecting Your Ride » Salvage Cars » Can you Insure a Salvage Title Car?

Salvage title cars are breaking all of the headlines in recent times and for many good reasons. Buyers simply love these cars because they can be an affordable option, especially to those who want to invest some time in doing repairs.

But one question that keeps popping up is, Can you insure a salvage title car? Many people are freaked off because of the salvage title designation and do not know the specific steps and challenges and costs involved in this process. So, let’s break it down for you and explain what it takes to insure a salvage title vehicle.

What is a Salvage Title Car?

Before we delve into answering the question, let’s answer another question that you need to know and that is, what is a salvage title car, what is the definition?

A salvage title is given to a car that has been deemed a “total loss” by the insurance company. This is typically due to severe damage from an accident, theft recovery, flood, or other incident. 

A car gets a salvage title when the cost to repair the car exceeds a certain percentage of its actual cash value (usually around 75% or more). In this case, the insurance company issues a salvage title to this vehicle. 

However, this designation doesn’t mean the car can’t be repaired and brought back to its former glory. Many salvage vehicles are repaired by professionals and pass safety inspections at the DMV, eventually earning a rebuilt title. Once a car has a rebuilt title, getting insurance becomes easier, even though it’s not as simple as with the case with clean title cars.

Can You Get Insurance for a Salvage Title Vehicle?

The short answer to this question is yes, but it depends on the insurance company and the car’s condition. 

We are saying this because not all insurance companies are willing to cover a salvage title vehicle. These cars simply carry higher risk. So, the companies are picky.

The damage history also makes it difficult to assess the car’s value accurately, and future issues may arise due to the severity of the prior damage. However, there are ways to insure a salvage title once the vehicle gets a rebuilt title.

Understanding Rebuilt Titles: A Step Closer to Insuring Your Car

Once a salvage title car has been repaired and passes a thorough inspection at the DMV, it can qualify for a rebuilt title. 

So, what this means is that the rebuilt title car is a vehicle that has been restored to roadworthy condition and has met state-specific inspection requirements. In other words, the car is safe for the road. However, even with a rebuilt title, some insurers may still be reluctant to offer coverage or will charge you a high premium to do so.

Typically, every rebuilt title vehicle is eligible for basic coverage like liability insurance. This insurance covers damages to other people or property in an accident. 

Comprehensive and collision coverage that you need in this case, can be more challenging to secure. What insurers do is often limit coverage options or charge higher premiums for these policies, as it’s harder to determine the rebuilt car’s value and its long-term reliability.

Types of Insurance Available for Salvage or Rebuilt Title Cars

Insuring a salvage or rebuilt title car comes with its limits. Here’s a mall breakdown of the types of insurance coverage that might be available for you as an owner:

1. Liability Insurance: Liability insurance is usually accessible for rebuilt title vehicles. This type of insurance covers bodily injury and property damage if you’re at fault in an accident. However, because liability coverage doesn’t protect the car itself, it’s a more affordable option for salvaged or rebuilt vehicles.
2. Comprehensive and Collision Insurance: Comprehensive insurance on the other hand covers damage from non-collision events, like fire, theft, or natural disasters. While collision covers damages from accidents. These coverages are harder to secure for salvage cars, and the insurance company will charge you higher premiums due to the increased risk. Not to mention the lack of companies who work with these cars.
3. Uninsured/Underinsured Motorist Coverage: Some of the US states require uninsured or underinsured motorist coverage for all vehicles, including those with rebuilt titles. This insurance protects you if another driver at fault doesn’t have adequate insurance.
4. Gap Insurance: Most insurers will not offer you with gap insurance on salvage or rebuilt title vehicles. Gap insurance basically covers the difference between the car’s value and the amount owed on a loan. Considering that salvage cars often have lower resale values, this type of insurance isn’t a viable option for the owner.

How Much Does It Cost to Insure a Salvage Title Car?

Another important aspect is the cost of insurance for such a car. While we cannot give exact numbers because it varies from model to model, we can say that the cost to insure a salvage title or rebuilt vehicle is higher than for cars with clean titles. Insurance companies require higher premiums for insuring these types of vehicles. To put things into perspective, this is 20-50 % or higher compared to clean title cars.

Factors Affecting Insurance Cost for Salvage Cars:

• Condition and Repair Quality: A properly-repaired car may receive more affordable insurance rates than a poorly restored car.
• Vehicle Type: Sports cars or premium vehicles will have higher premiums than economy cars.
• Location: Some states have specific rules regarding salvage title insurance, impacting rates.
• Insurance Provider: Each of the insurance companies views salvage cars with different eyes. So, asking for quotes from multiple providers can help you find the best rate.

While exact costs vary, we can say that insuring a rebuilt title car can cost 20-50% more than a car with a clean title, particularly if you seek comprehensive and collision coverage.

Steps to Get Insurance on a Salvage Title Car

Securing insurance for a salvage title vehicle takes some effort and patience. Here are the steps to follow:

1. Repair the Car to Roadworthy Condition: The first step is getting the vehicle repaired. This has to be done professionally. 
2. Obtain a Rebuilt Title: After repairs, you’ll need to have the car inspected and approved by your local DMV to get a rebuilt title. This inspection process makes sure that the car is safe and roadworthy.
3. Get Documentation: You should keep all repair records, including receipts for parts and labor, as proof of the car’s restored condition. This documentation is good assurance that the vehicle is reliable and safe to insure.
4. Shop Around for Insurance Companies: Not all companies insure salvage or rebuilt title vehicles, so start by researching companies that specialize in insuring these risky vehicles.
5. Request an Inspection from the Insurance Company: Some insurers will want to inspect the vehicle before offering a policy. This inspection helps the insurance company determine the car’s value and decide if coverage is feasible.
6. Consider State-Specific Rules: Insurance requirements vary by state, so make sure you understand your state’s rules about insuring a rebuilt title car.

Potential Challenges and Limitations

Although it is totally possible to insure a rebuilt title car, there are still some challenges worth considering:

• Higher Premiums: Insurance companies often charge more to cover rebuilt title vehicles because of the added risk. 
• Lower Resale Value: Even with insurance, a rebuilt title car usually has 20% or more lower resale value than a clean title alternative. This factor affects both gap insurance eligibility and your options if you decide to sell the car later.
• Fewer Insurance Options: Some major insurance companies simply don’t insure rebuilt title cars, especially if the vehicle has had severe structural damage.
• Potential Coverage Restrictions: Even if you secure comprehensive and collision coverage, some policies come with exclusions that limit the scope of coverage, especially for areas where prior damage occurred.

How to Insure & Register a Salvage Title Car

To drive a salvage title car legally, you must insure and register it, typically after converting it to a rebuilt title. 

The Process For Insuring a Salvage Car

The process of insuring usually involves providing the following documents:

• Rebuilt Title Certificate: Document that says that the car is rebuilt.
• Certified Mechanic’s Statement: A report from a certified mechanic. He has to make an inspection and confirm the repairs are done properly and the car is roadworthy.
• Repair Receipts: Receipt from the repair procedures.
• Photographs of Your Car: Some companies require before and after photos of the car to ensure that there is no fraud.
• Vehicle Identification Number (VIN): This is a unique 17-digit number for your specific car.
• Personal Information: Your personal information.
• Previous Insurance Records: Previous insurance records, if any.

It is worth noting that these documents are different for every insurance company. Some insurance companies are not that strict.

Companies that insure salvage cars include GEICO, Progressive, and USAA. 

• GEICO offers full coverage but requires inspection
• Progressive offers full insurance only to specific models
• USAA is exclusive to veterans and their families 

There are also other companies such as Allstate, Farmers, American Family, and State Farm that work with salvage cars.

The Process For Registering a Salvage Car

The process of registration usually involves providing documents like:

• Proof of Repair and Inspection: States often require proof that the car has passed a safety inspection.
• Title Documents: You’ll need the original salvage title, showing the car’s history, and proof of your ownership.
• Insurance Proof: A rebuilt title car usually needs at least liability insurance to be registered, so securing insurance is a critical step.

In some states, registering a salvage car can be a complex process, so check with your local Department of Motor Vehicles (DMV) for specific requirements.

Final Words

Insuring a salvage title car is possible but requires patience, research, and extra effort by your side. By understanding the steps involved, from repairs to obtaining a rebuilt title and shopping for insurance, you can find coverage that meets your needs. 

You should note that each insurance company handles salvage and rebuilt title cars differently, so it’s essential to get a few quotes before you decide to choose a company. 

Another step you should always take is running a vehicle history report through a reliable NMVTIS provider like ClearVin to get an accurate picture of what the vehicle has been through. Many websites offer a free vehicle lookup by VIN to help consumers make informed decisions when buying a used car. It’ll help you understand the extent of repairs you’ll have to make, and you can factor that into your budget.

If you have any questions about registering with us or need help placing a bid, you can call us at +1 (503) 298-4300 between 6:00 AM and 4:00 PM Monday through Friday, Pacific Standard Time, or you can email us at support@AutoBidMaster.com and our Buyer Services team will be happy to help.

FAQs About Insuring a Salvage Title Car

1. Is it harder to get insurance for a salvage title car compared to a car with a clean title?

Yes, insuring a salvage title car is generally more difficult but not impossible. Many insurance companies do not cover salvage or rebuilt title vehicles because they’re considered higher risk. However, once a car has been repaired and has a rebuilt title, companies may offer you liability coverage or a comprehensive and collision coverage. Still, you will need to shop around and will be asked for higher premiums compared to a car with a clean title.

2. How much does it cost to insure a rebuilt title car?

The answer to the question how much does it cost to insure a rebuilt title car is not that simple. The cost of insuring a rebuilt title car depends on several factors such as the make, model, age, and repair quality. Typically, premiums for rebuilt title vehicles are 20-50% higher than for cars with clean titles, especially if comprehensive or collision coverage is available. However, liability insurance for rebuilt cars may be more affordable.

3. What documents do I need to insure a salvage title car?

In order to insure a salvage title car, you need proof of ownership (like the original salvage title), an inspection report showing the car has been repaired and is roadworthy, and any repair receipts. If the car already has a rebuilt title, you’ll also need to provide that document to show the vehicle has been approved for road use. Keeping detailed records of all repairs can help demonstrate the car’s condition to an insurance company.