Salvage title cars can be appealing because of their lower prices, but they also present some unique challenges. If you're buying a salvage vehicle or already have one, you might be wondering about salvage titles and car insurance.
Here's what you need to know about salvage and rebuilt titles and what it takes to get these vehicles insured.
What Is a Salvage Title and How Does a Car Get One?
A salvage title is issued when a car has sustained significant damage and the cost of repairs exceeds its market value. When this happens, the insurer declares the vehicle a total loss, and the title status is changed to “salvage.”
Salvage titles indicate that the vehicle is considered not roadworthy or too expensive to repair. In many states, these cars can’t be legally driven until they’re repaired and inspected.
Some common reasons a car might receive a salvage certificate include:
- Severe collision damage
- Flood or fire damage
- Theft recovery where the car was missing for a long time
- Vandalism or other significant damage that is not worth repairing
While these cars often sell for much less than similar vehicles with a clean title, they typically require repairs and additional paperwork before being returned to the road.
From Salvage to Rebuilt: The Restoration and Inspection Process
To get a salvage vehicle back on the road legally, you’ll need to convert the title from salvage to rebuilt. This involves much more than basic repairs.
Here are the steps to take:
- Repair the vehicle: You or a licensed repair shop must restore the vehicle to a roadworthy condition. Keep records and receipts of all work completed.
- Pass a state inspection: After completing repairs, most states require an inspection to verify that the vehicle meets operational and safety standards.
- Apply for a rebuilt title: Once your vehicle passes inspection, you can apply to your state’s motor vehicle department to update the title status from salvage to rebuilt.
Even with a rebuilt title, the car’s salvage history stays on record, affecting the value of the car and your ability to get full coverage insurance.
Can You Get Insurance for a Rebuilt Title Car?
You can get insurance for a rebuilt title car, but it's usually more limited than what you'd find with a clean-title vehicle. Liability insurance is typically available from most providers, but comprehensive and collision coverage may be harder to secure.
Before comparing quotes, it's helpful to understand the common types of insurance.
What is full coverage car insurance?
“Full coverage” is a general term to describe a combination of liability, comprehensive, and collision coverage.
What is comprehensive car insurance?
Comprehensive coverage helps pay for damage caused by events other than a collision, such as theft, fire, or vandalism.
Collision insurance pays to repair or replace your car if it’s damaged in a crash.
Many companies won’t offer collision and comprehensive insurance for rebuilt vehicles, or they may limit the payout amount. Others may require additional inspections, higher deductibles, or special documentation.
Coverage Limitations and Risks To Consider
Even when you find an insurer, there are several trade-offs to consider:
- Lower payout values
- Limited or modified coverage
- Higher premiums and deductibles
- Slower, more difficult claims
- Policy instability
If your rebuilt car is your daily driver, it’s important to weigh these insurance risks. These limitations can become major issues if the car is damaged again.
Where To Find Insurance for Rebuilt Vehicles
Not all companies write salvage title insurance policies. Start with regional or high-risk auto insurers who specialize in non-standard vehicles.
Here are tips for finding coverage:
- Use online comparison tools to see which companies serve your area.
- Work with an independent agent who understands salvage titles and rebuilt cars.
- Have inspection reports, photos of repairs, and repair receipts ready to help convince insurers to offer you coverage.
Take the time to shop around. Each insurer evaluates salvage title vehicles differently, so quotes can vary.
What Factors Affect the Cost of Salvage Title Insurance?
The insurance rate for a rebuilt title car depends on several variables. While a salvage history always plays a role, other factors contribute as well:
- Vehicle type: A luxury vehicle or high-performance car usually costs more to repair and insure.
- Extent of prior damage: Insurers may ask about the extent of damage to the car, including whether it was flood-related, structural, or cosmetic.
- Inspection results: A clean inspection with detailed records can improve your chances of securing better coverage.
- Vehicle age: Older vehicles usually cost less to insure, even if they were previously totaled.
- Location: Insurance costs vary by zip code based on local repair costs, theft rates, and accident statistics.
Providing as much information as possible about repairs and inspections may help you qualify for lower premiums.
Is Buying a Salvage Title Car Worth It?
A salvage title car can be a smart way to save money upfront, but it’s not for everyone. If you’re restoring a rare model or have experience making repairs, the lower price might make sense. Just keep in mind that full coverage car insurance may be hard to find, and some buyers will be hesitant when it’s time to sell.
Compare Quotes for Rebuilt Title Car Insurance
Getting the right insurance for a salvage or rebuilt title car starts with comparing your options. Insurance prices and availability vary based on your zip code, vehicle details, and driving history.
It’s free to get started and only takes a few minutes to compare quotes. Visit EverQuote to get custom insurance comparisons tailored to your car and location. Rates change often, so comparing regularly helps you find the best deal for your rebuilt vehicle.