Can You Insure a Car with a Salvage Title?
When you are in the market for a vehicle, you may come across deals that seem too good to pass up. Among these can be cars with a salvage title, which are often available at significantly lower prices than their clean-title counterparts. However, the allure of a great deal comes with its own set of considerations, particularly when it comes to insurance. Understanding the nuances of insuring a salvage title vehicle is crucial for making an informed decision.
So, the question is this: “Can you insure a car with a salvage title?”
The simple answer is no, you cannot get an auto insurance policy for a vehicle that has become “salvage” through a major accident or otherwise by having encountered something so extreme that the previous owner needed to write it off as a total loss. The only way back is to repair the vehicle to such a degree that an insurer will consider insuring it. Read on to better understand the options available to you.
What Is a Salvage Title?
What does a salvage title mean? It’s assigned to a vehicle that has been deemed a total loss by an insurance company due to an accident, flood, or other damages. The cost of repairing the vehicle exceeds its value before the damage occurred. However, once the car is repaired and passes a safety inspection (requirements vary by state), it can go back on the road.
The catch? It will forever carry the mark of its past as a salvage title vehicle. So, can you insure a salvage title? Not before you get that salvage status changed.
Whenever an insurer runs a background check on your car based on its VIN (vehicle identification number — think of it like a social security number for your car), they’ll see that it was likely in a major accident (by the way, don’t forget the five steps to filing an auto claim) or another issue that led to it receiving salvage status. This can pose problems for you even if you can bring it back to working capacity.
The Insurance Conundrum for Salvage Titles
To insure salvaged vehicles is where the path gets tough. Many insurers hesitate to offer comprehensive coverage for these cars due to the difficulty in assessing their true condition and value. The skepticism stems from concerns over the vehicle’s safety and the potential for hidden defects that could pose risks down the line. This doesn’t mean it’s impossible to obtain insurance, but the process may involve more steps, higher premiums, and a bit more legwork from the owner.
Fortunately, a good agent who has experience with salvage titles can help you better understand what options might be available to you, given the circumstances. If this vehicle is special to you, perhaps an old collector’s car or maybe one that has passed down through the family over a couple of generations, its sentimental value might make it worth insuring, even if the premiums might be higher than they otherwise would be with a non-salvaged car.
Common Misconceptions about Salvage Title Insurance
There are several myths surrounding salvage title car insurance that need dispelling. First, it’s not true that you can’t insure a salvage title car; it’s just more complicated. Another misconception is that insurance for salvage vehicles is prohibitively expensive.
While rates are generally higher, they’re not always astronomical and can be manageable with the right insurer. Last, some believe salvage title insurance only offers minimal coverage. In reality, coverage options vary, and it’s possible to find policies that provide comprehensive protection.
Here’s the full list of common misconceptions about auto insurance, as they relate to salvage titles:
- Misconception 1 — Salvage Title Cars Can’t Be Insured. As mentioned, you can get coverage for a vehicle that’s been repaired and brought back to a functional and safe condition. In other words, a rebuilt title means that the car is safe to operate on the road again.
- Misconception 2 — Insurance for Salvage Titles is Exorbitantly Expensive. A good agent can mitigate this factor by helping you customize your protection to balance costs.
- Misconception 3 — Only Minimal Coverage is Available. Some carriers may offer comprehensive and collision coverage for a vehicle with a salvage title, meaning that it’s still insurable.
- Misconception 4 — Insurers Will Not Pay Out Claims on Salvage Title Cars. There’s a myth that even if you have insurance on a salvage title car, the insurer will find a reason not to pay out in the event of a claim. If your car is insured and you’re paying your premiums, the insurance company is obligated to honor valid claims according to the terms of your policy.
Again, a knowledgeable agent who understands the ins and outs of these types of cars can help you better understand the insurance products that might make the most sense for you. Some agencies and carriers may also specialize in these types of vehicles. Nevertheless, it’s up to you to figure out if it makes sense on a cost basis to insure a car that may have seen better days, especially when you factor in the upfront repair costs and any ongoing maintenance that might be required (think expensive things like bodywork that only a professional welder can accomplish).
Navigating Your Coverage Options
It’s important to shop around when looking to insure a rebuilt salvage title vehicle. Start by reaching out to insurance companies that specialize in non-standard vehicles. Be prepared to provide detailed information about the car’s history, repairs, and any inspections it has passed. Some insurers might require a thorough inspection by a certified mechanic or their own adjuster to assess the vehicle’s condition. Liability coverage is generally easier to obtain, so finding comprehensive or collision coverage may take more effort. Consider the value of adding endorsements or extra coverage for specific components or scenarios.
If you’re able to get your vehicle back up to working condition through repairs or by finding a reputable mechanic in your area, then you can explore what kinds of coverage make the most sense for insuring a salvage title car. Again, since you salvaged this vehicle, you may decide it makes sense to carry lower liability limits than you otherwise would in order to save money on your premiums. An agent can help you determine the right balance between protection and affordability, especially for a unique situation involving a prior major accident and salvage history.
Making the Choice: Is Salvage Coverage Worth It?
Deciding whether salvage title insurance is worth the hassle and expense boils down to a few key considerations. Evaluate the cost of the policy against the value of the vehicle and your financial situation. Consider the level of risk you’re comfortable with: Remember, cars with a history of significant damage might be more prone to issues. Also, thinking about the car’s intended use — daily driving, a project car, or perhaps a backup vehicle — can influence your decision.
Consider the long-term implications of insuring a salvaged car. If you plan to keep the vehicle for many years, investing in good coverage might make sense. Conversely, if you see it as a temporary solution, minimal coverage could suffice. Also, consider the vehicle’s resale value; a well-maintained salvaged car with a comprehensive insurance history might retain more value than one without.
Does your vehicle have value as a part of a collection? If so, then it might make even more sense to go through the process of repairing and restoring the vehicle to its original condition — even though you’ll likely see higher premiums. Again, it all comes down to your goals and what you’re planning to accomplish with your newly restored vehicle.
Getting Coverage for a Salvage Title
Ready to get started with an auto insurance policy for your salvaged vehicle? At Acceptance Insurance, we specialize in these unique situations, and our agents can help you customize a plan that makes sense for you. To get started, request an auto insurance quote online, give us a call at (877) 792-4917, or visit your local Acceptance Insurance location for more information.
