Looking for a budget-friendly vehicle? You may encounter cars with salvage titles. While they are generally cheaper and still fully functional, insuring them is a different story. A salvage title is assigned to a vehicle that an auto insurance company has declared a total loss due to extensive damage or theft. They require special car insurance for salvage cars.
Our guide helps you understand the ins and outs of car insurance for salvage title vehicles, what to expect, what options are available, and how to find auto insurance companies that will offer salvage car insurance policies for these vehicles.
What is a Salvage Title Car?
A salvage title is issued to a vehicle declared a total loss by an insurance company after suffering significant damage such as flood, vandalism, or a severe collision.
When the insurance claim’s repair cost exceeds the car’s fair market value, the insurer may determine that replacing the vehicle is more cost-effective than repairing it, and that’s when a salvage certificate is issued.
Vehicles with salvage titles are no longer roadworthy, and their value drops significantly due to hidden risks if repairs are not done thoroughly. Auto insurers usually sell these vehicles at auction or to a salvage yard.
However, a salvage vehicle can be rebuilt and restored to roadworthy condition. A licensed repair specialist must do the extensive repairs and ensure the vehicle meets state safety and functionality standards. Once it passes the state inspection, the salvage title is replaced with a rebuilt title, and the vehicle is now legally drivable.
While vehicles with rebuilt titles can be insured, not all car insurance companies offer coverage for them, and those that do may have limitations on coverage. Rebuilt title cars can get rebuilt title insurance and be driven legally on the road.
Vehicles with salvage titles cannot be insured or driven until repaired and reclassified. If you plan to buy a rebuilt title vehicle, check its repair history and available car insurance options before committing.
Rebuilt Title vs. Salvage Title: What’s the Difference?
Both rebuilt and salvaged title vehicles have been badly damaged and are more expensive to fix than to replace the car. But the main difference is the repair status.
A salvage title car has not been repaired, drivable, or insurable. A rebuilt title car has been restored, inspected, and deemed roadworthy. It can be insured and driven.
Before buying a car, always check if it has a clean, salvage, or rebuilt title. Some states use color-coded titles to identify the type of title:
- Green Title – clean title with no significant damage history.
- Blue Title – salvage title the car is a total loss.
- Orange Title – rebuilt title: the salvage car has been repaired and meets state safety standards.
Title color codes vary by state, so always check the car’s title history before you buy.
Types of Salvage Title Insurance
Although salvage title insurance is not available, some insurers offer car insurance for rebuilt title cars. However, the options are limited due to the risks involved with previously totaled vehicles.
Liability Coverage
Liability auto insurance is required in all states except New Hampshire, so it’s one of the more common coverage options for cars with rebuilt titles. Most insurers that do offer policies for rebuilt cars only provide liability car insurance so the vehicle can be driven legally.
Property damage coverage pays if you’re found at fault in an accident that damages another car or property.
Comprehensive and Collision Coverage
Getting comprehensive and collision coverage for vehicles with a rebuilt title car is much more complicated. Many insurers won’t offer comprehensive insurance policies to these types of vehicles due to the risks involved with previously salvaged cars. Policyholders will expect higher premiums and possibly coverage limits if coverage is available.
- Collision coverage covers damage to your car from a crash with another vehicle or object.
- Comprehensive coverage covers non-collision related damage, such as theft, vandalism, fire, hail, or a fallen tree.
If you’re insuring a rebuilt title car, be sure to compare insurance providers and understand any restrictions or rate increases that apply.
Steps to Insure a Salvage Title Vehicle
Insuring a salvage title vehicle requires getting it roadworthy and insured. Since insurance companies limit coverage for rebuilt cars due to previous damage and uncertain repair history, you need to do it right.
- Inspect and Document the Vehicle—Inspect the car’s exterior, interior, and mechanical components. Take pictures or videos of the car at the time of purchase and record any visible damage and needed repairs.
- Get a Certified Mechanic’s Statement—Hire a licensed mechanic to perform a complete vehicle inspection. Once repairs are completed, ask for a written statement that the vehicle is roadworthy and meets safety standards.
- Apply for Rebuilt Title – Apply to your state’s Department of Motor Vehicles for a rebuilt title. Each state has different requirements, including inspection fees, paperwork, and emissions testing. A rebuilt title is required before the vehicle can be driven or insured.
- Shop for Car Insurance – Get quotes from 3 to 4 insurance providers. Many insurers only offer liability coverage for rebuilt vehicles, while comprehensive and collision coverage may have higher premiums or restrictions.
- Submit Required Documents to Your Insurer – Provide necessary paperwork, including a certified mechanic’s statement, pictures or videos of the car, and the repair costs of the damages and repairs done.
- Buy a Car Insurance Policy – Once the insurer approves your application, buy the policy and ensure you have the required coverage to drive the vehicle legally. Insuring a rebuilt salvage title car can be challenging. Still, you can increase your chances of getting insured with proper documentation and research.
Where to Buy Salvage Title Insurance
After your car is repaired and you have a rebuilt title, you may be eligible for liability insurance and, in some cases, comprehensive and collision insurance.
Some places to find car insurance for your rebuilt salvage car are listed below.
- Non-standard Insurers – Some insurance companies, like Insurance Navy, specialize in high-risk auto insurance, including rebuilt title vehicles.
- Standard Insurers—While some regular insurers may offer limited coverage for rebuilt vehicles, the situation varies. Be prepared to shop around and compare policies; many standard insurance companies won’t cover vehicles with a salvage history.
- Online Comparison Tools – To make the search easier, the Insurance Navy and similar platforms allow you to compare quotes from multiple insurers and find the best rates for your rebuilt title car.
Insurance Costs for Salvage and Rebuilt Title Vehicles
If you want to insure a salvage or rebuilt title vehicle, expect higher premiums and limited coverage options than a traditional auto insurance policy. Since salvage vehicles have a history of significant damage, insurers consider them high risk, and their car insurance rates are higher.
Why Does Insurance Cost More for Salvage and Rebuilt Title Vehicles?
- Limited Coverage Options – Most insurers don’t offer comprehensive or collision coverage for salvage title vehicles, so you’ll likely be limited to minimum liability insurance. Even for rebuilt title cars, full coverage options can be hard to find or cost more.
- High Risk for Insurers – Salvage cars may have hidden mechanical or structural issues that weren’t fully repaired, so there’s a higher chance of future breakdowns or accidents. That’s reflected in higher car insurance rates.
- National Average Costs—As of June 2024, the national average for minimum coverage auto insurance is $640 per year, according to Quadrant Information Services. However, salvage and rebuilt title vehicles cost more to insure because of their history.
Factors That Affect Insurance Rates for Rebuilt Title Vehicles
- Vehicle Condition – A well-maintained car is considered lower risk and may qualify for better car insurance rates. Poorly repaired or aging vehicles may cost more.
- Vehicle History—A car’s accident history, mileage, and past repair records play a part in determining risk. If a vehicle has been totaled before, insurers may not want to insure it or charge more.
- Driving Record – Your personal driving history impacts car insurance costs. A clean driving record can get you lower rates, while accidents or traffic violations may result in higher rates or limited coverage.
- State Regulations – Each state has different car insurance requirements for rebuilt title vehicles, and some insurers only offer coverage in specific states. If you move, you may need to find a new insurer that covers rebuilt cars in your new location.
How to Save on Insurance for a Salvage or Rebuilt Title Vehicle
- Get Multiple Quotes – Since coverage varies by insurer, get at least three to four quotes to find the best rate.
- Raise Your Deductible – A higher deductible will lower your monthly car insurance premium. Still, you’ll pay more out of pocket if you file a claim.
- Look for Discounts – Some insurers offer policy bundling discounts, defensive driving course discounts, or low mileage discounts.
Insuring a salvage or rebuilt title vehicle is more expensive and difficult, but researching options, maintaining the vehicle, and looking for discounts can help you save overall.
Is Insuring a Salvage Title Car Worth It?
In most cases, you can get the minimum liability coverage to drive a salvage title vehicle legally. However, getting comprehensive or collision coverage may be more complex and expensive. Whether insuring a salvage title car is worth your money depends on your situation and the car’s value.
Suppose your insurance premiums are more than you paid for the car. In that case, it may not be worth insuring it beyond liability coverage. Some insurers will even charge you up to 20% extra because of the higher risk of salvage vehicles.
To avoid surprises as a potential buyer, always compare insurance quotes before buying a salvage title car. You may have a complicated or too expensive vehicle to insure without research.
Salvage Title Insurance Quotes are only a click away!
If you’re looking for cheap car insurance coverage, Insurance Navy can help. Call an insurance agent at 888-949-6289 for a free auto insurance quote. Quotes are also available via our website and mobile app. Get your car insured today and drive worry-free tomorrow.
Frequently Asked Questions
Can you get insurance on a salvage title car?
No, a salvage title car is not insurable and cannot be driven on public roads. But suppose the vehicle is repaired to meet state safety standards. In that case, it can get a rebuilt title, be insured, and be driven legally.
Can I get full coverage on a salvage title car?
No, full coverage is not available for a salvage title vehicle. But suppose the car is repaired, inspected, and gets a rebuilt title. In that case, some insurers may offer comprehensive and collision coverage, but it will vary in availability and cost.
Do you need to apply for a rebuilt title to drive salvage vehicles?
It depends on state laws. Some states require you to apply for a rebuilt title before you can legally drive the car, while others have additional requirements. The best way to confirm the rules in your area is to contact your local DMV. A salvage vehicle must be fully repaired, inspected, and insured before being driven on public roads.
What if I don’t disclose the salvage title to my insurer?
Your insurance company can access your vehicle’s history and accident records, so not disclosing your car has a salvage title will not go unnoticed. Providing accurate information is key to avoid policy cancellations or denied claims.
Do rebuilt salvage cars cost more to insure?
Yes, insurance for rebuilt title vehicles is more expensive—up to 20% more than standard vehicles. This is because of the higher risk of significant cost of repairs and hidden damage. You can lower your insurance costs by limiting the car’s use (e.g., not using it for commuting) or getting multi-policy discounts with the same insurer.
Does a rebuilt title affect insurance?
Yes, a rebuilt title affects insurance coverage and price. Rebuilt cars have a lower market value than clean-title cars, which can impact the coverage amount. Some insurers charge higher premiums because of hidden or recurring mechanical issues and potential safety concerns. Even if comprehensive or collision coverage is available, the payout in case of a claim will be less than expected because of the car’s value.
