Compared to how you get insurance for new or pre-owned cars, buying coverage for a vehicle with a rebuilt title is more complicated. However, you can find coverage for a salvage title car if you follow the correct steps.
How to Get Insurance on a Car With a Salvage or Rebuilt Title
If a car is damaged enough to be considered a total loss by an insurance company, it’s issued a salvage title by the state’s motor vehicle agency. There are several advantages to purchasing a vehicle with a salvage title: it’s considerably cheaper than a new or secondhand vehicle and can also be used for parts.
However, you can’t legally insure a salvage title car until it earns a rebuilt title, which is issued when a salvage title car is repaired and passes inspection. Car insurance options for salvage or rebuilt titles are typically more expensive, and not all companies cover these types of vehicles. Nevertheless, having insurance is necessary to operate your car and be financially protected if you get into an accident.
Although sometimes used interchangeably, there are differences between a salvaged and a rebuilt title.
You can’t register or purchase insurance for a salvage title car — it must have a rebuilt title to be insured.
Most providers are hesitant to offer full coverage policies, but some provide liability-only insurance for rebuilt title cars.
What Is a Salvage Title Car?
Salvage titles are issued to cars that an insurance company deems a total loss after an accident. A vehicle may also receive this title if the cost of repairs and its value for parts exceeds its pre-damage value. In contrast, a car never considered salvaged has a clear title, also known as a clean title. Typically, clear title vehicles cost less to insure and have higher resale values than those with a salvage title.
Insurance companies use several factors to determine whether a car is a total loss or not. States and insurers calculate for total loss differently, but they typically consider a vehicle totaled if:
- The damage to it is so severe that it’s not worth fixing.
- The amount of damage is between 60% to 90% of its car’s value.
- It was stolen and remains unrecovered.
The Differences Between a Salvage and Rebuilt Title
The state gives a salvage title to a car that has been deemed a total loss by a car insurance provider. If a vehicle with a salvage title is repaired and passes inspection, it’s eligible to receive a rebuilt title. However, keep in mind that not all salvage title cars can be restored. In these cases, a vehicle is declared “non-repairable,” meaning you can only use it for its parts.
An easy way to determine the type of car you have is by looking at the title’s color:
- Green — Clean Title
- Blue — Salvage Title
- Orange — Rebuilt Title
Can You Get Auto Insurance With a Salvage Title?
You cannot get a salvage title car insured because it’s not considered roadworthy. However, unless your insurance company deems your vehicle as non-repairable, you can restore it. In this case, it’s branded as a Rebuilt Salvage once it passes state-required inspections and can be insured.
You may find your insurance options for rebuilt title cars are limited. While some carriers refuse to cover a salvage or rebuilt title car, others only provide liability-only coverage. Although most insurance providers are hesitant to offer a full coverage policy, getting collision and comprehensive coverage is possible. One trade-off, however, is that premiums are more expensive, and the payout after an accident may be much lower.
How to Get Salvage or Rebuilt Title Insurance
The process of insuring a car with a salvage or rebuilt title is often more challenging than covering a vehicle with a clean title. Taking the following steps can help simplify the process.
Secure a rebuilt title.
Remember that you can’t get insurance for a salvage title car, but you can insure a vehicle with a rebuilt title. However, if the damage is extensive, your insurance company may declare your vehicle as non-repairable, in which case you’ll only be able to use it for parts.
Get a certified mechanic’s statement.
It’s crucial to have a secondary inspection performed by a certified mechanic before attempting to insure a rebuilt car. This measure ensures that any significant unaddressed issues from the restoration process are identified early. Most insurance companies will also require a second opinion before deeming your car roadworthy.
Figure out coverage options available to you.
You may find fewer options when purchasing insurance for a car with a rebuilt title. Some carriers flat out refuse to cover these types of vehicles, so it’s good to know which car insurance companies insure salvage or rebuilt titles. Since it is difficult to determine whether damages were caused by a recent incident or already existed, some carriers are hesitant to offer full coverage insurance to cars with rebuilt titles. Certain providers also charge more, resulting in a premium that costs up to 20% higher.
Always compare quotes.
Be sure to compare quotes from at least three auto insurance companies to find the best policies available to you. This step is particularly important when insuring a vehicle with a rebuilt title, as your options will likely be fairly limited.
Insurers for Rebuilt Title Insurance
Not all insurance companies offer coverage for cars without a clean title. If you’re looking to purchase insurance for rebuilt title cars, it’s best to know which ones do.
MoneyGeek recommends starting your search with quotes from these companies that do offer insurance for cars with rebuilt titles:
- GEICO (offers full coverage insurance but requires additional inspection)
- State Farm
- Progressive (offers full coverage insurance on specific vehicle models only)
- MetLife (only offers liability-only insurance)
Although these car insurance companies will insure salvage or rebuilt title cars, you’ll have to meet their specific requirements to be eligible to purchase coverage. There are also policy limitations for these types of coverages, so taking the time to compare quotations can help you find the policy that fits your needs.
Frequently Asked Questions About Salvage Title Insurance
Purchasing insurance for cars with salvage or rebuilt titles can be challenging. MoneyGeek answered some of the most commonly asked questions about the process to help make it easier.
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