Can I Insure a Car With a Salvage or Rebuilt Title?

What Is Salvage Title Car?

When the cost of repairs on a car exceeds the value of the vehicle, it is considered a salvage vehicle. There are many situations in which a salvage vehicle may be damaged to this amount. This includes vehicles that been damaged by hail or floods, stolen and recovered cars, and cars that have been damaged in an automobile accident.

If a car has a repair amount that is anywhere between 50% and 90% of its total value, the car might be considered a total loss in the state you are living in. Each state has different guidelines to help determine when a vehicle can be considered a total loss.

Insurance companies may choose to consider a car totaled more easily if it is an older model vehicle. The cost of labor can be more expensive in older cars, and of the value of the car can be quite a bit less. This determination is often made for business reasons, so the insurance company can pay less in the long run.

If someone is selling a salvage car, state law requires that the person informs the buyer of the vehicle in writing that the vehicle is salvaged. It is best when this information is explicitly given, but it does not always happen this way. Checking the vehicle identification number, or VIN, of the vehicle, can help make sure you are not purchasing a salvage vehicle.

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In addition, your insurance provider may offer only third-party liability coverage in your policy, or the minimum required by law in your province. You may be ineligible for collision or comprehensive coverage. 

How expensive is salvage car insurance?

For the most part, salvage car insurance is about the same price as traditional insurance. The real difference is the value placed on your vehicle.

Can you put full coverage on a rebuilt title?

As you have heard, it can be more expensive to buy comprehensive and collision insurance on a salvage car when you find a company that offers it. While having full coverage is important to some, you have to wonder whether or not it is worth it.

An insurance company already evaluates the value of a car low, but when the car is salvage you will only get about 80 percent of its salvage value.

Many times, this is lower than the cost of the insurance over just a short period of time.

It can be very difficult to decide to buy a car that you know has sustained a great deal of damage. If you have done the research and you plan to keep the car long-term, you can proceed and make a deal on the car.

Be sure to compare the cost of insurance with several companies through an online rate comparison tool and disclose the title status so that you cover all of your bases before buying.

Start comparing car insurance rates now by entering your zip code below.

What’s the difference between a salvage title and rebuilt title?

Cars with salvage titles have been declared a total loss and can’t be driven legally. But once a salvage car has been repaired and passes an inspection from a state-approved salvage inspection operator, it can qualify for a rebuilt title. A car with a rebuilt title can be registered, driven and sold.

However, it is common for people to mistakenly refer to rebuilt cars as salvaged title cars, even though they are two distinct and different vehicle titles. Because many people use these terms interchangeably, here we’ll assume that when discussing insurance for a salvaged car that it has been fixed and rebuilt.

What insurance companies cover rebuilt titles?

Below you’ll see which insurance providers offer coverage for salvage vehicles that have been repaired and earned a rebuilt title. Some carriers don’t offer coverage in all states, however.

Car Insurance Company Insurance Coverage for Salvage Cars? 21st CenturyYes (company does business in California and Hawaii only)ArrowheadYesThe HartfordYesInfinityYes; In CA if qualify for  state “good driver discount”National GeneralYes in AL, AZ, MO, NC, NY, PA, RI, WA; In CA if qualify for state “good driver discount”OmniYesProgressiveYesSafecoYes in all states except CAMercuryYesAllstateYesFarmersYesGeicoYesUSAAYesState Farm YesAAA YesCSAAYesAAA of Southern CaliforniaYes

Types of Branded Title on Cars

There are different types of branded titles. Some titles refer to a vehicle’s accident history. Other titles refer to a car’s ‘lemon’ status. Some branded titles let you know a branded vehicle has been fully submerged in flood.

Some of the most common types of branded car titles include:

What is a water damage branded title?

If a car has been fully submerged in water – say, during a flood – then it may receive a water damage title brand. Floodwater can cause mildew and mold in the car’s interior. Saltwater can significantly affect the integrity of your vehicle.

Check the vehicle history report for a water damage title brand. Any car that has been significantly damaged by water should have a water damage title brand.

Pros and Cons of Branded Titles

A car with a branded title might look new and run great, and buying one may be tempting. But before handing over your hard-earned money, consider these pros and cons: 

Pros

  • Branded title cars are cheaper: If you’re on a budget and looking for reliable, cheap wheels, a car with a branded title might be the answer. Branded title vehicles may cost half the price of a comparable car with a clean title.   
  • A newer vehicle may be within your budget: By purchasing a branded title car, you can stretch your budget. You can get a vehicle with more features than you’d otherwise be able to afford. 

Cons

  • Reselling your branded title car may present problems: Buyers may be suspicious of a branded title car, and the title may also slash the resale value.  
  • Financing may be difficult: Many lenders will only finance cars with clean titles. If your selected vehicle has a branded title, you may have to shop around for a car loan, and may pay higher interest. 
  • You may struggle to find an insurer: Not all insurance companies will insure cars with branded titles, so you may have to shop around for coverage.
  • Mechanical issues may be lurking: You’re taking a gamble with a car with a branded title. A car that has had major damage or other issues may not be reliable, and you might end up paying for expensive repairs. 

FAQ

Buying a used car is an important step, and for the sake of a good deal, it is crucial to ask questions. We have replied to the most common inquiries regarding used cars with branded titles sales.

How do you remove a branded title?

It is impossible to remove a branded title from a vehicle for good. It is a part of the car’s history. However, you can fix a Salvage title and transform the vehicle into a Rebuilt status. To do this, you have to purchase the car with a salvage title, repair it, get it inspected, and finalize the paperwork.

Can you insure a branded title car?

The answer to this question also depends on the type of branded title the car has. For instance, you cannot get a Salvage title vehicle insured since it has been declared a “total loss.” However, if you manage to get it a Rebuilt title, insuring it will be possible.

What is the difference between a branded title and a Salvage title?

In short, Salvage title cars are vehicles with title brands. Salvage title cars are not driveable due to a past incident. A branded title vehicle also typically also has certain defects and damage. However, they usually do not need major damage repair to function properly.

Is a branded title bad?

A car with a branded title is not necessarily bad. Branded title vehicles require a lot more time and money investment than new cars or the clear title ones. However, with an honest seller and a high-quality repair, it can be a really great deal!

Can you trade in a car with a branded title?

Yes, you can. If you have repaired a Salvage title car and received a new title “Rebuilt” for it, you have the right to trade it in. However, keep in mind that it could be a challenge, as not all dealers accept branded title vehicles.

How much should I pay for a branded title car?

The car’s price with a branded title depends on various factors, from the type of damage it has to its manufacturing year. To know the approximate price range for such vehicles, take the car’s market cost and deduct 20-40% of its original value.

How Much Does a Branded Title Affect Vehicle Value?

Needless to say, a car with a branded title decreases in value for good. Typically, a vehicle would lose 20-40% of its Blue Book value. However, only a qualified expert can evaluate and determine the market price for branded title vehicles.

There is a wide variety of branded titles for vehicles. They all signify different issues caused by factors varying in nature and severity. Thus, a used vehicle’s cost will highly depend on the specific title the car has received.

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Can I get auto insurance for a vehicle with a branded title?

Your ability to buy insurance on a vehicle with a title brand depends on what type of brand it has. If a vehicle has a brand that indicates it’s not safe to drive, such as a salvage title, you may not be able to register it or get it insured. Some insurance companies might only offer limited coverage types on certain title brands. For example, some companies will not offer collision insurance for vehicle with a rebuilt title. It’s a good idea to check with your insurance company before buying a branded-title car.

What are salvage and rebuilt titles?

Let’s say your car has been in a major accident or suffered serious damage due to theft, vandalism or natural disaster.

If the cost of the damage is close to or in excess of the fair market value of your car, the insurance company may declare the car a total loss. Your state’s transportation agency may give the vehicle a salvage title — though laws regarding when a salvage title is required may vary by state. In many states, salvage title vehicles can’t be driven on public roads.

If significant repairs have been done on a salvage car, it may be issued what some states call a rebuilt title. A rebuilt title indicates that a salvage title car has gotten the repairs necessary to make it safe for driving. To qualify for a rebuilt title, a salvage vehicle may need to pass state-mandated safety and anti-theft inspections. Required inspections may vary from state to state.

When Does a Total Loss Occur?

According to ValuePenguin, a total loss occurs when a vehicle has serious damage to the point that the cost of repair is more than a percentage of the car’s total cash value. Each state and insurance company uses a different percentage to determine when a total loss happens. In most cases, a car is deemed a total loss when the cost to fix it is between 60% and 90% of the car’s total value. Car insurers take possession of salvage title cars in most cases after paying off the owner. Usually, insurance companies turn to auctions to sell the car to a rebuilder or salvage yard.

How to Get Rebuilt Salvage Car Damage Insurance

You are going to want to compare a minimum of three or four quotes when searching for car insurance for your rebuilt salvage car. Keep in mind that damage insurance might not be worth the cost. You could pay more than the car is even worth. After you have found an insurer that is willing to provide you coverage, you will normally need to give them the following documents to get a quote:

  • Certified mechanic’s statement. This certificate verifies that your car is safe and in good working condition.
  • Photos of your vehicle. Sometimes they even ask for videos. If you were to make a claim, these photos will be looked at to see what damage was there before.
  • Repair estimate. This document will provide details about the previous damages and repairs made. This provides proof that damages have been adequately repaired.

Once you’ve provided these documents and photos, you will likely be able to purchase car insurance. It may not be the easiest process, but it is possible to find damage insurance for your rebuilt salvage title car.

Final Notes

Salvage title cars can often be found or bought at lower price levels than other cars. While many professionals say to avoid these types of vehicles, the situation behind why the vehicle got into the salvage classification is essential. Ask your insurance provider about any coverage add-ons you might be able to get as well. Insurance agents at General Insurance are available to assist you and answer questions that you have. It is vital to do proper research when looking to purchase any vehicle, and General Insurance is happy to take you through the process step-by-step.

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