Nerdy takeaways
- It can be tricky to find car insurance for a vehicle that was totaled in an accident, declared salvage and then rebuilt.
- Many car insurance companies will be less likely to cover a rebuilt vehicle because of the possibility of lingering issues.
- You’ll likely have to shop around for car insurance from multiple companies to get a (sometimes limited) car insurance policy for rebuilt salvage vehicles.
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What is a salvage title?
A vehicle receives a salvage title when it’s been so badly damaged that the insurance company declares the car totaled. The damage could be due to a collision, flood or serious crash.
Some insurers deem a car totaled when the cost of repairs surpasses the value before the damage. Others do so at lower levels of damage. Some states set minimum thresholds that define when a vehicle’s damage counts as a total loss.
If you live in a state that doesn’t have a standard for this, your insurer would probably use a Total Loss Formula to calculate if your car is worth repairing.
After your car is declared a total loss, the insurance company will pay you the actual cash value of the car before the damage (minus your insurance deductible), or replace your car with another vehicle. But if you want to keep the car, your insurer would subtract the salvage value from any payment.
Your state’s motor vehicle agency will issue a salvage title. Once a 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 and has since been repaired or restored by its new (or old) owner.
Insurance companies sell many totaled cars to scrap yards for parts, but in some cases a vehicle ends up being fixed instead — either because the insurance company sold it to a repair facility or the owner decided to keep and fix up the vehicle. The restored car must pass a safety inspection, at which point the state may issue a rebuilt title.
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 car with a salvage title 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 that can increase their chance of experiencing future damage, 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 and types of coverage required by law, but 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 before you act. It might also be a good idea to speak with an independent agent or insurance broker since your needs are a little more complicated than someone insuring a non-rebuilt title car.
When shopping for a car, you should always research the vehicle’s history and get a thorough inspection by a mechanic. It’s important to know about any potential risks before committing to such a big purchase.
See what you could save on car insurance
Easily compare personalized rates to see how much switching car insurance could save you.
Which companies offer rebuilt or salvage title insurance?
Once a vehicle has been repaired and inspected, you may be able to get insurance. Unfortunately, you’ll probably have fewer options than if your vehicle was never damaged.
Consider looking at a range of options like GEICO, Progressive, Kemper and The General. These insurers specialize in covering high-risk drivers and other complicated cases. But in this case, it’s your car and not necessarily your record that carries extra risk.
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