You may have heard the term ‘branded title’ or ‘branded title vehicle’ when dealing with car insurance or shopping for cars. What is a branded title? Does a branded title affect car insurance premiums?
Today, we’re answering all your questions about how vehicle title branding works, including what a branded title is and whether or not it affects car insurance premiums.
What is a Branded Title?
A branded title vehicle is a vehicle that has been involved in a major collision or accident or has suffered some type of significant damage.
When a vehicle has a branded title, it means the vehicle has previously suffered some type of serious damage or has been significantly compromised in some way. There are hail damage title brands, for example, and lemon title brands.
Title branding is handled by state agencies – like your state’s Department of Motor Vehicles (DMV). The system is designed to alert vehicle buyers of potential future problems with a vehicle.
Types of Title Brands
There are different types of branded titles. Some titles refer to a vehicle’s accident history. Other titles refer to a car’s ‘lemon’ status. Some branded titles let you know a car has been fully submerged in a flood.
Some of the most common types of title brands include:
Lemon Title Brand
Most states have some type of lemon law system. This lemon law system allows consumers to return new cars that have an unusually high number of problems. Lemon laws protect consumers and make it easy for vehicle buyers to return poorly made vehicles.
Each state’s lemon law system has strict requirements governing which types of defects qualify a car to be returned. These laws vary from state to state. A car that meets lemon law requirements in California, for example, may not meet lemon law requirements in North Carolina.
If a consumer has used lemon law protections to return a vehicle, then a lemon title brand gets added to that vehicle’s title. If the dealership chooses to resell that vehicle, then the next buyer will see this title brand on the vehicle history report.
Odometer Rollback Title Brand
A vehicle with 50,000 miles is worth considerably more money than a vehicle with 500,000 miles on it, all other things being equal. That’s why some unscrupulous vehicle sellers will ‘roll back’ the odometer, turning a high-mileage vehicle into a low-mileage vehicle in minutes.
Odometer rollback can be hard to detect without a skilled mechanic. However, if odometer rollback has been detected, then the vehicle will receive an odometer rollback title brand. This title brand appears on the vehicle history report. Future buyers know the odometer has been rolled back, although they might never know the actual mileage of the vehicle.
Salvage Title Brand
Some vehicles receive a salvage title brand after major damage. When a vehicle suffers damage that costs more to repair than the vehicle is worth, then the vehicle will receive a salvage title brand. The vehicle has been declared a total loss.
Different states have different rules governing salvage titles. In some cases, a car with a salvage title in one state may have its record wiped clean when moving to another state. Generally, however, vehicle buyers will be able to easily view the salvage title brand of a vehicle before buying that vehicle.
Water Damage Title Brand
If a car has been fully submerged in water – say, during a flood – then it may receive a water damage title brand. Flood water can cause mildew and mold in the car’s interior. Saltwater can significantly affect the integrity of your vehicle.
Check the vehicle history report for a water damage title brand. Any car that has been significantly damaged by water should have a water damage title brand.
Hail Damage Title Brand
60% of severe weather insurance claims every year are related to hail. Hail can have a significant impact on the resale damage of a vehicle, but it can also help used car buyers save a significant amount of money.
Not all states issue a title brand for hail damage. Hail-prone states like Texas, for example, have no hail damage title brand. If your state doesn’t have hail damage title branding, then it’s crucial you check the exterior of the car carefully for damage. Hail damage can be more severe than you realize.
All of the following states issue title brands specifically for hail damage: Arizona, Florida, Idaho, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Montana, Nebraska, New Hampshire, Ohio, Oklahoma, Pennsylvania, South Carolina, Washington, West Virginia, Wisconsin, Wyoming, and Washington D.C.
How Branded Titles Affect Car Insurance
Branded titles can significantly affect car insurance.
Yes, you can insure a car that has a salvage title. However, you may not be able to buy comprehensive or collision coverage. Collision and comprehensive coverage are optional policies that cover the cost of repairing your vehicle after a collision or during non-accident-related events.
If your car has a hail damage title brand, for example, then your insurance company may refuse to provide comprehensive coverage. Comprehensive coverage would normally cover the cost of repairing damage to your vehicle, but your insurer will claim they can’t separate the old damage from the new damage.
However, most insurance companies will happily provide liability coverage to vehicles with branded titles or salvage titles, allowing you to legally drive on the road and stay protected. This type of car insurance will also be significantly cheaper than full coverage insurance, which means a branded title vehicle can save you hundreds or even thousands on car insurance.
Without collision and comprehensive coverage, however, your vehicle will lack certain protections. You won’t be able to make an insurance claim if a tree falls on your car, for example, or if your car is stolen.
What is Title Washing?
States have different rules governing title brands. A vehicle may qualify for a lemon title brand in one state but not another.
Because of these different rules, some dishonest vehicle buyers will move cars between states to wipe away a title. This is called title washing.
Title washing can be tough to avoid, and damage may not appear on a standard vehicle history report. However, you may be able to spot title washing by doing an AutoCheck or CarFAX VIN Check, which tracks vehicle information between states.
A branded title is given to a vehicle that has been significantly damaged or altered in some way. When a vehicle has a branded title, it may make it difficult – or even impossible – to get comprehensive and collision coverage, although you should still be able to get liability coverage without issue.