To get insurance on a salvage title, know that you'll first need to convert it to a rebuilt title. This involves repairing the vehicle and passing a state-required inspection by a certified mechanic. However, even with a rebuilt title, your insurance options may be limited with higher premiums. Rebuilt titles are more expensive to insure, often costing up to 20% more than clean titles.
How to Get Insurance on a Car With a Salvage or Rebuilt Title
Updated: May 20, 2024
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Key Takeaways
A salvage title is issued to a car deemed a total loss by an insurance company. In contrast, a rebuilt title is granted to a previously salvaged car that has been repaired and passed state-required inspections.
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.
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How to Get Salvage or Rebuilt Title Insurance
To get started, you'll need to switch your salvage title to a rebuilt one. Once you've done that, you're ready to explore insurance options. But remember, before any insurer covers you, you'll need to fix up your car and have a certified mechanic give it the green light.
1
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, you won't be able to secure coverage, in which case you’ll only be able to use the car for parts.
2
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. Some state inspections might miss issues. A mechanic can give your car a closer look to ensure it's safe to drive.
- 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.
3
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. Local captive and independent agents can help you identify insurers who will write the coverage.
- Rebuilt cars typically have lower market values than vehicles with clean titles. Consider getting affordable liability-only car insurance to avoid overpaying for insurance.
- Can you get full coverage on a rebuilt title? 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. Usually, insurers will only provide full coverage after additional inspections and certain requirements are met.
- Some providers also charge more, resulting in a premium that costs up to 20% higher. If your premiums are worth more than your car, reconsider insuring and driving your rebuilt car.
4
Submit the insurer’s requirements
When applying for insurance on a car with a rebuilt title, you'll need to provide specific documentation to ensure you meet the insurer's requirements. Here's what you'll generally need:
- Rebuilt Title Certificate: The most crucial document is the rebuilt title itself, proving that the car has been repaired and passed all necessary inspections.
- Certified Mechanic's Statement: An inspection report from a certified mechanic is often required to confirm the car is roadworthy. This should detail the repairs made and any potential issues.
- Photographs of Your Car: Some insurers may ask for before-and-after photos of the vehicle to assess the extent of repairs. The pictures will serve as a reference for potential future claims.
- Repair Receipts: Keep all receipts related to the repair work done on the vehicle. This will provide a transparent record of what was fixed and the quality of the parts used.
- Vehicle Identification Number (VIN): You will need to provide the VIN for identification and verification purposes.
- Personal Information: Standard personal details such as your name, address and driver's license number will also be required.
- Previous Insurance Records: If the car was previously insured, those records might be requested for background checks.
- Appraisal Report: Some insurers may require an appraisal of the car's current market value.
- Driving History: Your driving record could influence the kind of coverage you can get and the premium you'll pay.
5
Always compare quotes
Be sure to compare quotes from at least three auto insurance companies to find the best policies available. After you've gathered your quotes, scrutinize the details of each policy. Look for any limitations or exclusions that could affect you down the line.
WHY ARE REBUILT CARS MORE EXPENSIVE TO INSURE?
Kelly Blue Book states that cars with salvage or reconstructed titles generally have lower market values, often 20-40% less than cars with clean titles. They're seen as higher risks due to their history of damage and repair, leading to higher premiums.
However, the actual value can vary based on damage, repair quality and the car's make and model. Have it appraised by a certified mechanic or professional to get a more accurate snapshot of your car's market value.
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 repair cost and the value of its parts exceed its pre-damage value.
Insurance companies use several factors to determine whether a car is a total loss. States and insurers calculate total losses differently, but they typically consider a vehicle totaled if:
- The damage 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.
A rebuilt title is the next step in the car's life cycle. This title is granted to a vehicle that was once deemed a total loss but has been repaired and passed state-required inspections. It signifies that the car is now considered roadworthy and insurable.
You can easily determine what car title you have by looking at the title's color:
- Clean Title — Green
- Rebuilt Title — Orange
- Salvage Title — Blue
- Junk Title — Red
A car never considered salvaged has a clear title, also known as a clean title. Typically, clean title vehicles cost less to insure and have higher resale values than those with a salvage title.
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A total loss means a car is too costly or unsafe to repair. This decision is made by insurance companies, who compare repair costs to the car's market value. However, some states have specific rules on when a vehicle is considered a total loss. Even if repaired, a total loss car requires special checks to be legally driven, insured and given a rebuilt title.
What’s the Difference Between a Salvage Title vs. Rebuilt Title?
Each state gives a salvage title to a car that has been deemed a total loss by an auto insurance provider. If a vehicle with a salvage title is repaired and passes inspection, it can receive a rebuilt title. However, remember 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, as you will be unable to obtain insurance coverage.
A salvage title and a rebuilt title refer to different stages in a car's life, each with its own implications for insurance, market value and legal usage.
Aspect | Salvage Title | Rebuilt Title | Clean Title | Junk Title |
|---|---|---|---|---|
Insurance Treatment | Limited to basic liability coverage, if available. They are deemed as total losses and not roadworthy. | Comprehensive and collision coverage may be available after repairs and state inspections, but options can be limited, and premiums might be higher. | Full range of coverage options are available, including comprehensive, collision and liability at standard premiums. | Not insurable due to being deemed beyond repair. |
Market Value | Significantly lower compared to clean titles; often sold for parts or to be rebuilt. | Higher than salvage titles but still less than clean titles. | Highest market value; considered the standard for vehicle sales. | Minimal value; typically sold for scrap or parts only. |
Legal Usage | They are not allowed to be driven on public roads and cannot be insured; they can only be sold for parts or as a project for rebuilding. | They can be legally driven on public roads and eligible for insurance, albeit often at higher rates. | Allowed on all public roads and meets all state regulations for operation. | Not allowed on public roads; considered unfit for operation. |
Purchase and Use | Can be bought, but mainly for parts or to be rebuilt — not for regular driving and cannot be insured. | Can be bought, driven and sold after passing state inspection. | Can be bought, driven and sold without restrictions. | Can be bought, but only for scrap or parts, not for driving. |
Junk title cars are not meant to be driven again. These vehicles are typically sold for parts or scrap metal and cannot be registered for road use or insured.
If someone were to attempt to restore a car with a junk title, it would typically require extensive repairs and then passing rigorous state inspections to prove its roadworthiness. Even then, some states might not allow a vehicle that has been given a junk title to ever be re-titled as rebuilt, regardless of the extent of repairs, and would consider the vehicle uninsurable.
A clean title car is one that has never experienced significant damage or been deemed a total loss by an insurance company. In contrast to vehicles with salvage or rebuilt titles, clean title cars are generally easier to insure. They face fewer restrictions and often enjoy a broader range of insurance options at standard premiums.
Can You Get Insurance on a Salvage Title Car?
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 to be 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.
CAN YOU DRIVE A CAR WITH A SALVAGE TITLE?
In most states, you can't legally drive a car with a salvage title. These titles mean the vehicle is a total loss and usually can't be insured, registered or driven. Some states allow exceptions if the car is repaired and passes safety checks, but rules vary.
What Insurance Companies Cover Rebuilt Title Cars?
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. Progressive offers full coverage insurance on specific models only. USAA is exclusive to members of the military and their families.
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 coverage, so comparing quotes 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 is difficult but not impossible, as many major insurers offer this coverage. MoneyGeek answered some of the most commonly asked questions about the process to help make it easier.
Can you get full coverage insurance on a rebuilt title?
Yes, you can get full coverage insurance for a rebuilt title car, but it may be hard to find a provider that will offer you this level of coverage. It will be hard to come by affordable full coverage insurance on a rebuilt title. Most carriers are hesitant to cover these vehicles as it can be harder to determine if damage to the car was caused by an accident or pre-existing. Liability-only insurance is more commonly available.
Are rebuilt titles more expensive to insure?
Yes, insurance premiums for cars with a rebuilt title are typically more expensive to insure than those with a clean title. Insurance companies often assume that people with rebuilt salvage title cars are more likely to file claims, resulting in up to 20% higher premiums. Most insurance companies don’t offer coverage for these types of vehicles — this decreased competition allows them to charge higher rates.
Are rebuilt cars harder to insure?
Remember that you can only get insurance for a rebuilt or clean title car. Although it’s possible to ensure a rebuilt title car, the process is longer and more complicated. A certified mechanic must inspect it to ensure it’s safe to drive. Once deemed roadworthy, your insurance coverage options may be limited. Not all carriers insure rebuilt title cars and those that do often offer liability-only — not full coverage — insurance.
About Mark Fitzpatrick
Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
sources
- Kelly Blue Book. "Frequently Asked Questions." Accessed August 29, 2023.