Getting insurance for a vehicle with a rebuilt title is more difficult than getting insurance for a new or used car. However, if you take the proper steps, you can find coverage for a salvage title car.
Cars with salvage titles have been damaged and declared a total loss by the previous owner’s insurance company. You can buy a rebuilt salvage title car, but finding car insurance for a totaled vehicle will be difficult. Follow through to find out how you can get insurance on a salvaged title vehicle and motorcycle.
To obtain insurance for a salvage title vehicle or motorcycle, it must be restored so that it can be driven safely again. It may still be difficult to obtain rebuilt title insurance after a vehicle has been restored. Some companies provide liability coverage for rebuilt salvage vehicles but not comprehensive or collision coverage.
Can You Get Insurance on a Salvage Title?
A car with a salvage title cannot be insured until it has been restored and inspected.
After passing inspection, a salvage title car receives a rebuilt title and can be registered for road use. However, finding car insurance — particularly full coverage protection — for vehicles and motorcycles with salvage titles remains difficult.
Insurance companies are frequently hesitant to cover rebuilt salvage cars. This is because they have suffered severe enough damage to be declared totaled, even if they have been significantly repaired.
After it’s rebuilt, you won’t be able to get full-coverage insurance for a salvage title, but you will be able to get liability coverage — and, as with any car or motorcycle, you’ll be required to have enough coverage to drive legally in your state.
Can You Get Insurance on a Salvage Title Motorcycle?
When a motorcycle has a salvage title, it has sustained so much damage that it is no longer worth repairing. States define “not worth repairing” differently, but it’s typically a percentage of the vehicle’s pre-damage value. In some states, the insurance company must declare the motorcycle a total loss.
Meeting the state’s requirements to apply for a motorcycle salvage title is the first step in obtaining a salvage title for a motorcycle. The requirements for obtaining a salvage title differ from state to state. If your motorcycle is a total loss, they usually define the age of the motorcycle and how expensive a buyer might consider the repairs to be when compared to the motorcycle’s pre-accident value.
If your bike meets your state’s definition of a salvage title motorcycle, you’ll need to apply for a salvage certificate of title. This title is a legal ownership document that indicates the bike’s salvage status. In some states, the Department of Motor Vehicles (DMV) location does not process salvage requests. You can check with your state DMV before applying for a salvage title motorcycle.
You must also pay the applicable fees in order to obtain your salvage certificate of title. These fees vary by state, but they are frequently less expensive than titling and registering a bike for road use.
Can You Get Insurance on a Salvage Title Vehicle?
Insurance on a salvage title allows you to legally buy or sell a vehicle. However, because it is generally illegal to drive one of these cars on the road unless it is to or from a vehicle inspection site, obtaining car insurance on a salvage vehicle is impossible.
If your vehicle has a rebuilt title, the situation changes. Driving a car with a rebuilt title is legal, and some insurance companies cover these vehicles.
However, not all providers provide insurance for a vehicle with salvage title. Those who do may have limited coverage options, and full coverage may be impossible.
What Is the Distinction Between a Salvaged and a Rebuilt Title?
When buying a car, the title will either be cleaned, rebuilt, or salvaged. The color of the paper on which the title is printed usually indicates what type of title it is, though this varies by state. Typically, each color represents the following:
- Green is a tidy title.
- Orange is a reworked title.
- The title Blue is a salvage title.
A rebuilt title differs from a salvage title. This is because a car with a salvage title must be repaired and then inspected to meet certain state standards. Once it meets these requirements, the salvage title can be exchanged for a rebuilt title, making it legal to drive.
Though it is more difficult to get insurance for a vehicle with a rebuilt salvage title, they are not all bad vehicles to own. In fact, many people who rebuild salvage cars can bring them up to factory specifications.
According to The Balance, it can be difficult to determine the quality of a car with a rebuilt title. Because each state has its own set of requirements for a car to qualify for a rebuilt title, quality can vary. Before purchasing a vehicle, have it inspected by a mechanic. They will test it to see if the parts and basic functionality are roadworthy or if major repairs are required. It’s preferable to pay for an inspection than to be stuck with a car that requires constant repairs.
Rebuilt titles are frequently equipped with refurbished parts. Check with the mechanic to ensure that all of the necessary parts are present and in good working order. If this is the case, it should be an excellent vehicle to buy.
What do Insurance Companies Require When Covering a Rebuilt Vehicle?
If you want to get your salvage title vehicle back on the road, it must pass state-mandated inspections. This is to determine whether it is safe to drive on the road. To qualify for auto insurance coverage, the vehicle must typically pass a mechanic’s inspection.
“Typically, the insurance company will want a mechanic’s statement that the car is roadworthy,” Gusner says. “This is especially true if you’re looking for comprehensive and collision physical damage coverage.”
When purchasing coverage for a vehicle with a rebuilt title, you must present your driver’s license and proof of vehicle registration, just as you would when purchasing standard car insurance. You may also be required to provide the vehicle identification number, VIN, a copy of the rebuilt title, or photographs of your vehicle.
How Do You Get Insurance on a Salvage Title?
Insuring a salvage title car can be a time-consuming and complicated process compared to insuring a non-totaled car. To obtain car insurance for a salvage title vehicle, you must:
- Repair the damage to the salvaged car.
- Allow your state’s DMV or equivalent agency to inspect it.
- Instead of a salvage title, get a rebuilt title.
- Find a company that will insure a rebuilt salvage vehicle.
- Send proof that your vehicle is roadworthy (and to insure)
- After your car has been restored, you must schedule an inspection with your state’s Department of Motor Vehicles.
This usually entails paying a fee, which could be as little as $8 (in Texas) or as much as $200. (in New York). These inspections ensure that you did not reassemble your vehicle using stolen parts. You may also need to have your vehicle inspected for safety to ensure that it is roadworthy.
Once the salvage title has been cleared, you’ll need to find a company willing to provide rebuilt title insurance. To get insured, you may need to send pictures or have a professional mechanic verify that the vehicle is safe to drive to the insurance company.
What Is the Cost of Rebuilt Title Insurance?
The cost of insurance for a rebuilt title car varies. This depends on the insurance company, the extent of the pre-repair damage to the car, and the amount of coverage purchased, among other factors.
Insurance for a rebuilt title car may be more expensive than insurance for a non-totaled car of the same model, though this is at the discretion of the insurance company. Insurance companies may charge more to insure rebuilt titles because they are concerned about unseen sources of damage that were not fully repaired.
How to Get Salvage or Rebuilt Title Insurance
Insuring a car with a salvage or rebuilt title is frequently more difficult than insuring a vehicle with a clean title. The steps listed below can help to simplify the process.
#1. Obtain a rebuilt title.
Remember that you cannot insure a salvage title vehicle, but you can insure a rebuilt title vehicle. If the damage is severe, your insurance company may declare your vehicle unrepairable, in which case you will only be able to use it for parts.
#2. Obtain a certified mechanic’s statement.
Before attempting to insure a rebuilt car, it is critical to have a secondary inspection performed by a certified mechanic. This measure ensures that any significant unresolved restoration issues are identified early. Most insurance companies will also require a second opinion before approving your vehicle for road use.
#3. Research the various coverage options available to you.
When looking for insurance for a car with a rebuilt title, you may have fewer options. Some carriers flatly refuse to cover these vehicles, so it’s important to understand which car insurance companies cover salvage or rebuilt titles. Some carriers are hesitant to offer full coverage insurance to cars with rebuilt titles because it is difficult to determine whether the damage was caused by a recent incident or already existed. Certain providers also charge more, resulting in a 20% higher premium.
#4. Always contrast quotes.
To find the best policies available to you, compare quotes from at least three auto insurance companies. This step is especially important when insuring a vehicle with a rebuilt title because your options will most likely be limited.
Insurers for Rebuilt Title Insurance
Not all insurance companies provide coverage for vehicles that do not have a clear title. If you want to buy insurance for rebuilt title cars, you should know which ones do.
- MoneyGeek suggests beginning your search with quotes from the following companies that offer insurance for cars with rebuilt titles:
- GEICO (offers full coverage insurance but requires additional inspection) (offers full coverage insurance but requires additional inspection)
- State Farm Insurance
- 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 vehicles, you must meet their specific eligibility requirements in order to purchase coverage. There are also policy limitations for this type of coverage, so comparing quotes can help you find the policy that best meets your needs.
If you’re thinking about purchasing a rebuilt title vehicle, make sure to check with your state’s transportation agency to learn about state laws. You should also get a vehicle history report, such as a Carfax report, and have the car inspected yourself to ensure that it was properly repaired and is safe to drive. Check with your auto insurance provider to see if it covers rebuilt vehicles — or if you’ll need to find another policy.
It is critical to shop around and compare insurance quotes when purchasing car insurance for a vehicle with a clean title. This may provide you with reasonably priced options, especially if you only need liability coverage for your vehicle.
Is it more expensive to insure a rebuilt title car?
Yes, insurance rates for vehicles with rebuilt titles are typically higher than those for vehicles with clean titles. Insurance premiums can increase by up to 20% because insurance companies frequently believe that owners of rebuilt salvage title vehicles are more likely to file claims. Since the majority of insurance providers don’t provide coverage for these kinds of vehicles, there is less competition, which allows for higher premiums.
Can you get full coverage insurance on a rebuilt title?
Yes, you can obtain full coverage insurance for a vehicle with a rebuilt title, but it might be challenging to locate an insurer who will do so. Due to the difficulty in determining whether damage to the car was pre-existing or the result of an accident, the majority of carriers are reluctant to provide full coverage insurance for these vehicles. More frequently, liability-only insurance is offered.
How does a vehicle get a salvage title?
When a car is deemed a total loss by the insurance company but is still repairable and deemed safe to drive, it is given a salvage title. A total loss can be caused by a variety of problems, such as damage from a car accident or other problems like fires or floods. If the damage to the vehicle exceeds its actual cash value, also referred to as the total loss threshold, the insurance company will declare the vehicle a total loss.