Salvage Title Insurance for Totaled Cars

Salvage titles are cars that have been declared a total loss. But can you insure them? This article will help you learn more.
car with salvage title

Do you have a car with a salvage title? It may be harder to find auto insurance if you own a salvage or rebuilt title car than one with a clean title. This article will help you understand salvage titles and how owning one could affect your ability to buy car insurance.

What is a Salvage Title?

Cars with salvage titles have been declared a total loss and unworthy to repair by insurance companies or registered owners. A car is a total loss when the cost of repairs surpasses its market value.

Auto insurance companies often declare a car as a total loss if it falls within a certain percentage of the car’s value, such as 50 to 90%. It’s important to note that each state and insurer has its own idea of what makes up a total loss.

Totaled cars are usually the result of major damages. Common examples include:

  • Collisions with other cars or objects
  • Natural disasters such as tornadoes, floods, and earthquakes
  • Vandalism
  • Theft, either of your car or hard to replace parts

Once you or your insurance provider label your car a total loss, you must report it to your state as a salvage. Your state will issue your car a salvage certificate. This makes it illegal to drive on public roads and highways. You have some options if you have a salvage title car. You can:

  • Sell it
  • Keep it and pay to repair it
  • Keep it and use its parts, either to sell or re-use

Salvage cars that undergo proper repairs and pass a thorough inspection can qualify for a rebuilt title. Be aware that each state has unique inspection processes and standards when issuing a rebuilt title.

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Difference Between Rebuilt and Salvage Titles

People often confuse salvage titles with rebuilt titles. While both involve totaled cars, they have their differences and aren’t the same. Below is some quick info on both rebuilt and salvage titles:

Rebuilt Titles

A rebuilt title is a salvage vehicle that’s been rebuilt or repaired to a drivable state. Cars can get a rebuilt title when they receive repairs and fulfill state requirements to become drivable.

Rebuilt car requirements often include an inspection, the specifics of which vary by state. Some states, such as Washington, also require salvage owners to complete a checklist before they can convert their salvage title to a rebuilt one.

Because rebuilt titles are safe to drive, you’re likely to see them if you’re in the market for a used car. Rebuilt cars can end up being cheaper than clean title cars. But it could be hard getting proper auto insurance. Some insurers, like PEMCO, won’t offer coverage options such as collision or comprehensive car insurance to rebuilt title car owners.

You may need to do the following for the state to issue a rebuilt title:

  • Make sure your car has proper repairs to make it drivable
  • Check your state’s requirements for rebuilt titles
  • File the right documents (applications, forms, etc.) with your state
  • Schedule an inspection

Salvage Titles

A salvage title refers to a car that an owner or insurance company deems a total loss. Salvage vehicles are illegal to drive or park on public roads. Salvages must become a rebuilt title before you can drive them.

Should You Buy a Car with a Salvage Title?

Buying a car with a salvage title could save you money, but it can also be risky. You’ll likely have a tough time finding insurance and may face some expensive repairs. Consider that salvage cars have sustained damage to the point where they’re no longer road-worthy. If you wanted to drive one, you’d have to take the steps to get it a rebuilt title.

Buying a salvage car could be more trouble than it’s worth for most people. Below are some pros and cons to buying a car with a salvage title:

Pros:

  • You could save money. Salvage cars cost less money than normal clean title cars because they’re damaged and need a lot of work to fix. You could save money if you have the time, experience, or resources to repair a salvage, especially if you buy a car that would normally cost a lot more.
  • You might be able to get spare parts. If you don’t repair your salvage car, you could use it for parts. This is helpful if you’re a car enthusiast and want several parts that may be pricey if bought new.
  • You could get a special car. Buying a salvage might be a good idea if you happen to find your dream car or a car you want that would otherwise be too expensive. In this case, you’d be able to repair it and make it a rebuilt title.

Cons:

  • Potential fraud. Salvage vehicle sellers might leave out some crucial info and only report minor damage, even if it’s much worse. You could end up paying much more than you bargained for if you buy one of these cars.
  • Hard to find auto insurance. Most companies won’t insure salvage title cars. Or, at the very least, they’ll only offer you a limited coverage policy.
  • Hard to finance. Many banks and lending companies don’t want to finance salvage cars. This is because salvage title cars are hard to value due to many factors, including damage, year, make, mileage, and others.
  • Hard to sell. Though they’re cheaper than clean title cars, salvage cars come with many risks and potential costs that may scare off some buyers.
  • Not able to drive. Salvage cars aren’t legal to drive. That means you’d have to rebuild yours if you wanted to take it on the road.

Buying Auto Insurance for Cars with Salvage Titles

It’ll be difficult to get auto insurance if you own a car with a salvage title. Most car insurance companies don’t insure salvage title vehicles. This is because they’ve sustained so much damage that they’re unsafe to drive. Rebuilt title cars are still hard to insure because they were once a total loss, causing concern for insurance providers.

You’re also unlikely to get full coverage if you do manage to find a company that’ll insure your salvage. Many insurers will only offer limited coverage options, leaving out collision and comprehensive auto insurance. Keep in mind that cars with salvage titles will usually be more expensive to insure than clean title cars due to their increased risks.

Salvage title cars are also known as branded title vehicles. Branded titles refer to any vehicle that’s a total loss due to a bad accident, flood, fire, or theft. Insurance companies will often say that they don’t insure cars with branded titles, including salvages.

To find coverage for your salvage title vehicle, you can contact an agent or insurer directly. You can also get auto insurance quotes from companies that cover salvage cars.

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

Though many of the major auto insurance carriers don’t offer coverage for salvage titles, there are still some options. While companies will charge more to insure salvage title cars, many factors affect your auto rates. Insurers will often look at the following when deciding your premium:

  • Your age
  • Car make and model
  • Zip code/where you live
  • Yearly mileage
  • Your driving record
  • How much driving experience you have

You can still try to get a good deal on your car insurance, even though salvage titles come with higher auto rates than clean title cars. It’s smart to look around the market and compare car insurance prices. That’ll help you find the best deal for your situation.

Frequently Asked Questions

Q: Do salvage title cars cost more to insure?

A: Yes. Car insurance costs much more for those with a salvage title. It’ll also be harder to find insurance, as most companies don’t offer coverage for salvage cars.

Q: Can I remove “salvage” from my title?

A: The only way to remove “salvage” from your car’s title is to take the steps to change it to a rebuilt title. To get a rebuilt title, your car must pass an inspection and/or complete a checklist, showing that it’s fully repaired and safe to drive on public roads.

There’s no way to make your salvage or rebuilt title a clean title again, however. Salvage or rebuilt title car owners might move to a new state and try to pass their car off as a clean title. This is a form of fraud called “title washing.” For this reason, be sure to carefully review vehicle history using the VIN when you buy a used car.

Q: Is a rebuilt title the same as a salvage title?

A: A rebuilt title is not the same as a salvage title. Cars get salvage titles when owners or insurance companies declare them a total loss. Cars with rebuilt titles used to be total losses, but now have passed an inspection and are legal to drive.

Q: Can I get full coverage for my salvage title car?

A: Most insurers won’t offer full coverage for salvage cars. You’ll likely get a more limited policy, including liability insurance. Other options such as collision and comprehensive coverage will probably be off the table.

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