Today, we’re answering all your questions about insuring a car with a rebuilt title or a salvage title.
What is a Salvage Title?
When a vehicle has a salvage title, that means your car has been declared as a total loss and can no longer be driven on public roads. Your car may have been totaled in a collision, for example, and damaged to a point where it cannot safely be driven.
If your car has never been in an accident, then it’s said to have a “clean title”. A car with a clean title has never suffered serious damage.
If your vehicle has been totaled, however, then that means it’s been in an accident where the cost of repairing the vehicle is higher than the value of the vehicle. The specific limit varies between insurance companies and states. Typically, however, if the cost of repairs exceeds 60% to 90% of a vehicle’s value, then your car is declared to be “totaled” and you might receive a salvage title.
If you choose to repair your vehicle, then it may qualify for a rebuilt title, which means the vehicle can be driven on public roads.
If Your Car Can’t Be Driven on Public Roads, then You Can’t Purchase Car Insurance
If your car has a salvage title, then that means your car cannot be driven on public roads. You cannot purchase car insurance on a car that cannot be driven on a public road.
If you repair the car to a point where it can safely be driven on public roads, however, then you may qualify for a rebuilt title. At this point, your car insurance will function as it normally does: you can purchase car insurance for a vehicle with a rebuilt title.
Some Car Insurance Companies Will Refuse Full Coverage for Cars with Rebuilt Titles
Most car insurance companies in the United States will happily offer liability insurance for a rebuilt salvage car. Liability insurance is the minimum car insurance required to legally drive on roads in the United States. It protects other vehicles and people on the road but does not cover damage to your own vehicle.
However, most car insurance companies will not let you buy full coverage insurance for rebuilt salvage cars. The reason is simple: it’s difficult to assess all existing damage to a rebuilt salvage vehicle. On a standard vehicle that has never been in an accident, it’s easy to spot which damages were the result of a recent accident. On a rebuilt salvaged vehicle, it’s not as easy, which is why insurance companies don’t often provide collision coverage or comprehensive coverage.
How Do I Get a Salvage Title?
If a vehicle is totaled during an accident, then the insurance company will reimburse the policyholder for the value of the vehicle. Then, the insurance company will take possession of the vehicle. If the vehicle is declared a total loss, then it will be issued a salvage certificate, which means the vehicle cannot be registered or driven on public roads.
Once a vehicle has a salvage certificate, the insurance company will typically auction off the vehicle. A salvage yard might purchase the vehicle for spare parts. Or, some businesses and individuals specialize in rebuilding vehicles.
After a car is rebuilt and passes an inspection, then the vehicle’s title might move from a salvage title to a rebuilt title.
As a car buyer, it’s important to understand the difference between a clean title and a rebuilt title. A car with a rebuilt title has been involved in a serious accident in the past. A car with a clean title has never been in a serious accident.
Some Vehicles Are Given Non-Repairable Titles
When a vehicle is issued a salvage title, it indicates that the vehicle can be repaired to be roadworthy in the future if someone chooses to repair it.
In some cases, however, damage to the vehicle is so serious that the vehicle will be issued a non-repairable title. In this case, the car cannot be repaired to be roadworthy ever again. Parts of the vehicle can be used in other vehicles, but the vehicle itself can never be repaired to a point where it receives a rebuilt title.
Conclusion: You Can Insure a Car with a Rebuilt Title But Not a Salvage Title
If your car has a salvage title, then the car cannot be driven on public roads. If your car cannot be driven on public roads, then you cannot get insurance on that vehicle.
However, if you rebuild the vehicle and it passes an inspection, then the vehicle might be issued a rebuilt title. Most car insurance companies will offer liability insurance – but not full coverage – for vehicles with a rebuilt title.