Auto Insurance

How to Insure a Car with a Rebuilt or Salvage Title

How to Insure a Car with a Rebuilt or Salvage Title

Most insurance companies offer minimum liability insurance for rebuilt salvage cars so you can drive the car legally.

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Cars with salvage titles have been declared a total loss and can't be driven on public roads, so you can't purchase insurance for one. However, once a salvage car has been refurbished and tested, it can qualify for a rebuilt title — meaning it can be registered, driven and sold.

What is a salvage title?

A salvage title — or branded title — is given to a car after it's been so badly damaged that it's declared a total loss.

This is different from a clean title, which is what cars have if they've never suffered serious damage, had the odometer altered or been determined to have a defect.

Total loss happens when a vehicle suffers significant damage, and the cost to repair it exceeds a certain percentage of the car's actual cash value.

The level of damage for a car to be considered a total loss varies by state and auto insurer, but it's typically between 60% to 90% of the car's value.

For example, in Oregon, the threshold is 80%, whereas it's 100% in Texas. Your insurance company typically declares whether the car is a total loss.

Once a vehicle is declared a total loss, it will be issued a salvage certificate, which means that the vehicle cannot be registered or driven on public roads.

  • After getting a salvage title, insurance companies auction off the vehicle to rebuilders or salvage yards.
  • If the car is rebuilt and passes an inspection, it can then be issued a rebuilt title.

Difference between a rebuilt and salvage title

Cars with a rebuilt or salvage title have both been severely damaged to the point of being more expensive to repair than replace. The difference is that a salvage title car has not been repaired, and a rebuilt title car has been fixed.

In other words, a salvage car cannot be driven legally on the roads and can't be insured. However, if you fix a salvaged car, you can get a rebuilt title showing that it meets your state's requirements for being roadworthy and can be insured.

Type of title
Can you drive on roads?
Can you get minimum insurance?
Can you get full-coverage insurance?
Clean title
Yes
Yes
Yes
Salvage title
No
No
No
Rebuilt title
Yes
Usually
Sometimes
Junk title
No
No
No

Before you buy a car, you need to determine if it has a clean, salvage or rebuilt title. Often, you can determine what type of title a car has by the title's color. However, the color designations vary by state.

In most states:

  • A green title is clean.
  • A blue title is salvage.
  • An orange title indicates the car is a rebuilt salvage.

You typically can't purchase a salvage car — unless you're authorized to do so — but you can buy a rebuilt salvage vehicle from any private seller.

There's nothing inherently bad about a car that has a rebuilt salvage title, and many are reconstructed to a standard that's near that of a factory.

However, it can be hard to determine the quality of the rebuild unless you're quite familiar with cars. Since each state has its own standards for a rebuilt title status, it's important to get your own inspection done, as some states don't require tests beyond checking for parts and basic functionality. A mechanic can help you understand if there are any major problems with the car, or if it's road-ready.

It's common for cars with a reconditioned or restored titles to have a fair number of refurbished parts, but there shouldn't be issues as long as the parts are in good condition and none are missing.

Difference between a non-repairable and salvage title

In some cases, a car is damaged so severely that it's declared unfit to be driven, even if it were to be substantially repaired.

If this is the case, the car is given a non-repairable title (also called a junk title) instead of a salvage title. Since there's no way to restore the title, a non-repairable car cannot be used for anything other than parts.

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Can you insure a car with a rebuilt or salvage title?

You cannot insure a car with a salvage title since it can't be driven on the road. Cars with rebuilt titles can be insured, but the process is more difficult than for cars with clean titles.

Most insurance companies will write a liability policy for a rebuilt title car, but are often hesitant to offer a full-coverage policy.

Since it's already challenging to assign an accurate value to a rebuilt salvage title car, and the insurer may not be able to determine whether damages were due to a particular incident or already existed, it's harder to secure optional coverage — such as collision and comprehensive.

According to Kelley Blue Book (KBB), a rebuilt salvage title car is typically worth 20% to 40% less than one that has a clean title. If you make a comprehensive or collision claim on a rebuilt salvage car, you should be prepared for a much lower insurance payout.

Another concern is safety. Reconditioned salvage title cars may have issues that were not addressed in the restoration process and can lead to danger on the road.

For example, a mechanic might overlook certain structural or alignment issues, or even skimp on certain procedures during the restoration to make the process cheaper. Car insurance companies realize the risks of this situation and often assume rebuilt salvage title cars will be more likely to result in insurance claims.

How to get rebuilt salvage title car insurance

Some insurers won't cover rebuilt salvage title cars — even if you just want liability insurance — so be prepared to compare quotes from multiple companies.

  • Shop around: If you want full-coverage auto insurance, with comprehensive coverage, you'll need to contact several insurers and provide information about the vehicle's history to see who will offer you rebuilt salvage car insurance.
  • Be prepared for higher rates: Not every insurance company charges more for rebuilt title vehicles, but some insurers add a surcharge of up to 20%.
  • Consider reducing your coverage: In many cases, it can be a better deal to only get liability coverage rather than full coverage because the potential payout for any damage to the car is lower.
  • Know when to opt for a car with a clean title:If the amount you're paying in car insurance exceeds the amount you saved by purchasing a rebuilt salvage car, then you may want to reconsider your options.

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Once you've found an insurer that will cover a rebuilt salvage car, you'll typically need to provide info about your car to get a quote and purchase a policy:

  • Certified mechanic's statement: This is required by most insurers in order to verify that the car is in good working order.
  • Photos of your car: Pictures of your car — and video in some cases — will be necessary if you want full-coverage insurance. The photos act as "before" images that the insurer can compare damage to if you make a claim.
  • Your car's original repair estimate: The original repair estimate should be provided to you when you purchase a rebuilt title car, as it details the damages and improvements made to the vehicle. By getting the original repair estimate from the rebuilder or the insurance company that totaled the car, you give the insurance company proof that all damage has been repaired.

Which insurance companies cover rebuilt titles?

State Farm and Geico offer full-coverage insurance for rebuilt title cars.

Progressive, Allstate and Mercury also offer policies for rebuilt title cars, but there may be restrictions, such as only providing liability coverage . They may not offer comprehensive and collision, which cover the cost of damage to your rebuilt car.

Best car insurance companies for rebuilt title cars

Company
Covers rebuilt salvage title cars
Rating
State Farm
Yes - liability and full-coverage options; photo inspection required
Geico
Yes - liability and full-coverage options
Progressive
Yes - may require a photo inspection
Allstate
Yes - liability only
Mercury
Yes
Liberty Mutual
No

Because insurance for a rebuilt title car is not a standard policy, you usually need to call to get a quote. And even if an insurer offers this type of policy, whether or not they will insure a rebuilt car is typically determined on a case-by-case basis depending on the car's damage history and the repairs that have been made.


Frequently asked questions

Can you get insurance on a salvage title car?

No, a car with a salvage title is not legally allowed to drive on the roads, and it can't be insured. However, if you repair the car to meet your state's standards, a salvage title car can be issued a rebuilt title. Then it can then be insured and driven on the roads.

Do rebuilt salvage cars cost more to insure?

Yes, it usually costs up to 20% more to insure cars that have a rebuilt title because of the higher risks associated with these types of major repairs. However, you can lower insurance costs for a rebuilt car by not using the car for commuting or qualifying for a discount by having multiple policies with the same insurance company.

Can you get full coverage on a rebuilt title car?

Yes, it is possible to get full-coverage insurance. However, not all companies offer it. The potential payout for damage to the vehicle may be less because a car with a rebuilt title is generally worth less than a car with a clean title. In many cases, it's a better deal to only get liability insurance for a car with a rebuilt title.

What are the best insurance companies for rebuilt salvage title cars?

State Farm and Geico have the best car insurance for rebuilt title cars because they are highly rated companies that have full-coverage options for previously salvaged cars.


Sources

Insurance company coverage information about rebuilt title cars and their restrictions was sourced from insurers and insurance agents. Company rating information is based on the independent review of all policy options by ValuePenguin's editorial team, factoring in customer service, affordability, coverage offered and overall shopping experience. Additional information was sourced from multiple states' departments of motor vehicles (DMVs).

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.