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Insuring Branded Title Cars: What You Need To Know

Learn how to insure a branded title car, including coverage options, challenges, and tips for finding the right insurance policy.

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When you purchase a car, you receive its title. The title not only shows ownership rights but also reveals details about the vehicle. Most cars come with "clean" titles, meaning they don't have a history of total loss or accident. However, some vehicles come with branded titles, and understanding this is crucial before purchasing the vehicle.

Branded title cars may have more risks than cars with clean titles, and insuring a branded title car can be more challenging and costly.  

Understanding Branded Titles

Every vehicle has a title, which you'll receive when you buy it and complete the car registration process. The title states the vehicle's year, make, model, and title type. 

Clean titles are the most common (aka normal) type, but you'll also find branded titles, which might include:

  • Salvage 
  • Rebuilt 
  • Odometer issues
  • Water damage 

These branded titles inform you that the vehicle had an issue at some point, and the title type tells you more about the problem. For example, a salvage title refers to a car that experienced extensive damage. 

Rebuilt titles also refer to vehicles repaired after significant damage, often a total loss from an accident. A car with water damage was likely involved in a flood. If the vehicle's odometer is wrong, the title should reflect the error by stating it has odometer issues under the title type. 

Importance of Insurance for Branded Title Cars

Car insurance is required in all states for all vehicles, except New Hampshire and Virginia, including for branded title cars. However, purchasing branded title car insurance may pose some challenges to car owners. 

Regardless, having car insurance is important for financial and legal purposes. Car insurance protects you from financial losses if you cause an accident that harms someone else and protects you legally from the repercussions you face from driving without insurance.

Steps To Insure a Branded Title Car

When buying cars with rebuilt titles, you might wonder, "Can I insure a branded title car?" The answer is yes, but you may need to contact several insurance providers and compare their rates. 

Insurance companies experience more risk when offering branded title car insurance plans, which causes higher insurance rates for these vehicles. Here are the steps to insuring a branded title car:

Securing a Rebuilt Title

You can acquire cars with salvage titles in two main ways:

  1. You can buy one. When you do this, the seller should tell you it has a rebuilt title before closing the deal. 
  2. If you had an accident that left you with a totaled car, the insurance company will notify your state's Department of Motor Vehicles (DMV) that it was totaled. This notification causes the title to state that it is a salvage vehicle. You can keep and fix the vehicle, which means you'll have a running vehicle with a salvage title.

Obtaining a Certified Mechanic's Statement

To insure the vehicle, you must have it inspected by a certified mechanic. After the inspection, the mechanic will provide a statement stating that a certified mechanic inspected the vehicle and deemed it safe to drive. 

Understanding the Coverage Options

Next, you must find an insurance provider willing to provide insurance coverage for the vehicle. Some insurance providers will not issue policies for branded title vehicles, but those who do may have rules relating to the types of coverage they offer for cars with salvage titles. 

For example, some companies offer liability insurance only, while others offer collision and comprehensive coverage on salvage vehicles. And others might issue additional types. 

Comparing Quotes From Insurance Providers 

Ask for quotes when you find insurance companies willing to issue coverage on your branded title vehicle. You can request quotes from multiple companies to compare the costs, coverage amounts, and types of salvage title insurance

Insurance companies base insurance costs on many factors, but purchasing liability coverage only is usually the most cost-effective option. 

Risks and Benefits of Purchasing a Branded Title Vehicle

Insurance companies consider a car a total loss when it costs more to repair a car than the vehicle's fair market value. However, totaled cars can be salvaged in many situations. 

If the damage doesn't affect the car's ability to drive safely or if you can fix the car to make it drivable, fixing it might be cost-effective. 

Purchasing a branded title vehicle can also be cost-effective. Because of their branded titles, these cars typically sell for lower prices. Branded title cars often sell for 20% to 40% less than cars with normal titles.

Along with these financial benefits, buying a car with a rebuilt title can come with risks, including problems with the vehicle. A totaled vehicle may have more damage than what the eyes can see. The vehicle might look fine and appear to drive well, but it might have issues that occur later on that could make the car dangerous to drive. These problems might also lead to costly future repairs. 

Another risk is the challenge of finding affordable car insurance. Because of the risks involved, branded title car insurance is harder to find.

Disclosure of Title Status

There are several reasons why buyers have the right to know if a vehicle has a branded title before purchasing. 

  • Branded titles may decrease a car's vehicle, as it might have inherent issues. 
  • Insuring a branded title car differs from insuring a normal title car. As a result, once a car acquires a branded title label, it's there for life, and sellers have the legal responsibility to disclose this when selling a vehicle. 
  • Once the title has the branding, you cannot legally change it back to a normal title. 

As a car owner, you are responsible for being transparent with an auto insurance company when buying insurance for a branded vehicle. If you experience a car accident and file a claim with your insurer, they will see the branding on the title. They may refuse to pay the claim if you do not disclose the branded state. 

Making Informed Decisions When Insuring Branded Title Cars

Insuring a branded title car may take more work than insuring a normal title car, but it's not impossible. EverQuote simplifies the process. 

Contact us today to connect with auto insurers that provide insurance policies for branded title cars.