How to get Car Insurance with a Salvage or Rebuilt Title
Vehicle owners can be stubborn when admitting that some auto damage is just too much or can’t be repaired. The car may be damaged beyond fixing, or the cost of repairs exceeds the car’s value by a more-than considerable amount for the insurance company to consider it a total loss, or “totaled” for short. The insurers then send the policyholder a payout equal to the car’s value at the time minus deductibles. The Department of Motor Vehicles also issues what is known as a “salvage certificate” to the vehicle, also sometimes referred to as a “salvage title.” This certifies that your car is now legally undrivable typically. However, after repairs and an inspection, the vehicle can be brought back into action as a special case with what is called a “rebuilt title.” Regardless of the car’s condition or how much it is being used, it still may able to be insured. Here’s everything you need to know about insurance and titles when it comes to a car that has seen much better days.
What is a Rebuilt and Salvage Title?
As previously mentioned, a car is issued a salvage title if it is declared that repairs are either impossible or not worth it, according to the insurance providers. An accident with another driver or a nature-related incident like a storm can severely damage a vehicle. The insurance company will declare your vehicle a loss if the repair costs would be greater than your car’s current value (also called “fair market value”) or if the main functionality is seriously compromised like a broken engine. Most insurance companies draw the line anywhere between 60% to 100% of said value. The salvage title isn’t issued by the insurance company but rather by the state’s DMV. This certifies that your car can no longer be driven and can only be used for spare parts -hence the “salvage” in the name. Since the car can no longer be driven, their former drivers often don’t insure them. Some states prohibit auto coverage for vehicles with a salvage title, while others may be indifferent.
A rebuilt title comes into play when the totaled car receives sufficient repairs to become road-safe again. The state’s DMV will also issue this. Your auto insurance policy would cover a portion of the repairs while you would handle the remainder. Once the repairs are made, the car will be subject to safety and anti-theft examinations by the DMV. Once an approving grade is given, they’ll assign a rebuilt title to the car. Now, it’s legal to drive and operate again just as it was before it was totaled. However, a record of its recorded loss will be permanent on its vehicle history. The rebuilt title alone is a statement that it has been totaled at one point. Now, there is the matter of getting this rebuilt car insured to comply with required insurance laws. That is unless you live in New Hampshire.
How Does A Salvage Affect Auto Insurance?
When an insurance company declares a car totaled, then the coverage is revoked as the policyholder receives a vehicle payout equal to the current market value of the car make and model. They will not pay out your policy deductible, however. So, totaling a car and receiving a salvage title won’t cause a skyrocket in your auto insurance rates since there is none because there is no vehicle to insure anymore. A car with a salvage title usually doesn’t qualify for insurance coverage. It shouldn’t be driven, so there’s no legal need to have liability coverage. Insurance companies are more open to providing coverage when the car is fixed and has a rebuilt title. The only time a salvage title car should be driven is to an inspection.
Finding insurance for a rebuilt car can take some time, but there are plenty of insurers that specialize in cars with rebuilt titles. The DMV only checks the essentials and safety features during their exams, so it’s possible the vehicles may have some minor lasting issues. The electric systems may be faulty at times, the frames could be bent, and aesthetic damage could lead to mold. It helps to receive multiple quotes and compare as each insurance company handles salvage rebuilt customers differently. Some only provide the legally required liability insurance as opposed to full coverage to cars with titles. So, drivers wouldn’t be covered in comprehensive or collision situations. They would be on the line for paying for your own repairs and medical costs. The two most important things you can keep in mind when thinking about insuring a vehicle with a title are the vehicle history and how limited coverage the insurers provide.
What Happens to a Car with a Salvage Title?
The car may be done for when it’s declared a total, but that doesn’t mean that some of its parts are. If the car owner decides not to have it repaired, then it’s usually stripped of its parts that still work while the rest is sent to a junkyard. Since they paid out the car’s market value, the insurance company does this while you shop for a new car. Some salvage title cars are kept whole if someone were interested in buying and repairing them for themselves.
What is There To Weigh When Buying a Car With a Salvage Title?
Buying a car that was declared a total loss is rarely a matter of whether or not it’s affordable but how much the repairs cost. The average consumer wouldn’t want to pay more for repairs than they would for a car. But there are blue moons where they come across a totaled car that doesn’t have too severe of damage to be considered inoperable, and says yes would seem like a no-brainer.
On the other hand of buying or keeping a salvage car, some complications would be:
- Illegality of driving - Unless it’s a trip to the auto repair shop, driving a car with a salvage title is against the law. You’ll need repairs and an official vehicle inspection in order to get a rebuilt title and thus be able to drive legally.
- Nonrepairable title - This third title is the stage below salvage because, at that point, the car could at least be fixed. After an examination, the DMV can issue a nonrepairable title to cars broken beyond repair. They don’t allow you to make repairs at all and take whatever working parts they can.
- May not have all the information - There have been commonly reported cases of consumers never getting the full story on the salvage title car they purchased. Purchasing a salvage vehicle requires knowing everything about it from the moment it was sold to the time when it was totaled. There may be details of longer-lasting issues with the car than what was described.
- Uninspected issue - Water damage and bend frames are the primary red flags of salvage vehicles. It’s essential to get the car inspected because issues like these can go under the radar and cause major damage down the road. Water damage can corrode and rust certain parts, and bend frames can compromise the structure as a whole.
How do You Get a Rebuilt Title For a Totaled Car?
You’ve probably made the decision to try to restore your car that was declared a total loss or bought one and made all the repairs. The vehicle inspections are done at DMV-approved inspection stations or a station often run by a third party. Some states’ rebuilt titles have application processes and fees you may need to pay even to be evaluated. You’ll also have to provide your salvage title, photos of your entire vehicle and the damaged area, and receipts or sales records of auto repairs and any new auto parts you have bought.
Now You Have a Rebuilt Title on Your Vehicle
You can now drive anywhere legally and are eligible for auto coverage. However, it may take some effort to find an insurance company that offers full coverage for such a vehicle. This is the only form of insurance available for a salvaged car and can only be issued after repairs and safety examination. For the final time, a totaled car can’t have insurance until it is repaired and given a rebuilt title. By now, you should have an idea of how to handle this situation if it arises. Obtaining a rebuilt title is a manner of knowing who to go to, how much you’re willing to pay for repairs, your current auto insurance policy limits, and the value of your car. Check your car’s mileage, driving history, and make as indicators of its value to better gauge what your car’s breaking point is. The choice to restore a salvage car may be better than buying a new one altogether.