How to Insure a Car With a Salvage or Rebuilt Title
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Buying a car that was totaled in an accident, declared salvage, then rebuilt can seem like a great deal. But salvage car insurance could be trickier to find than a typical policy.
Here’s what to consider before buying a car with a salvage or rebuilt title, or before repairing your own totaled car.
What is a salvage title?
A vehicle receives a salvage title when it’s been so badly damaged that the insurance company determines it’s not worth fixing. The damage could be due to a collision, flood or other disaster.
Some insurers deem a car totaled when the cost of repairs, plus the vehicle’s value for parts, surpasses the value before the damage. Others do so at lower levels of damage. Many states set minimum thresholds in their insurance regulations, such as 75% or 80% of the value before the crash.
After your car is declared a total loss, the insurance company will pay you the value before the damage (minus the deductible), and the state’s motor vehicle agency will issue a salvage certificate. Once your vehicle is marked as salvage, states generally forbid driving the car until it's been repaired and inspected.
What is a rebuilt title?
A rebuilt title is issued for a car that previously had a salvage title but has since been repaired.
Insurance companies sell many totaled cars to scrap yards for parts, but in some cases a vehicle ends up being restored instead — either because the insurance company sold it to a repair facility or the owner decided to keep and fix up the vehicle. The repaired car must pass a safety inspection, at which point the state may issue a rebuilt title.
The car’s history as a salvage vehicle remains a permanent part of its record, which may explain why some people use the terms “salvage title” and “rebuilt title” interchangeably, despite their differences.
Not all totaled vehicles are eligible for a rebuilt title. Some cars are so badly damaged that the state will declare them “non-repairable,” meaning they can be used only for parts.
» MORE: How to buy a used car
Salvage and rebuilt title insurance
You generally can't insure a salvage title car because it's not roadworthy. But even after it's been repaired and given a rebuilt title, you may have a hard time finding insurance. These cars sometimes have lingering issues, such as bent frames, faulty electrical systems, missing airbags or mold.
Some companies may not insure such vehicles or may charge more to cover them. Others may provide only liability coverage, not comprehensive and collision.
So, if you’re thinking about buying a car with a rebuilt title or refurbishing your totaled vehicle, shop around for car insurance quotes from several companies. It’s wise to get these quotes before you agree to buy the car in case you have trouble finding the coverage you want at an affordable price.
You should always research the vehicle’s history and get a thorough inspection by a mechanic before committing to a purchase. For more information, see these tips on buying salvage title cars.
Which companies offer rebuilt or salvage title insurance?
Once a vehicle has been repaired and inspected, you may be able to get insurance from the following companies:
*USAA insurance is available only to active military, veterans and their families.
Note that some companies have restrictions on this coverage. For example, American Family requires photos of the vehicle before issuing a policy, while Nationwide offers only liability insurance unless the car’s previous damage was purely cosmetic.