How to Insure a Car With a Rebuilt or Salvage Title
Last Updated on October 25, 2023
If you have a vehicle with a salvage or rebuilt title, then you may need unique insurance.
You cannot typically insure a car with a salvage title, as the salvage title means the car is unfit to drive. However, you can buy car insurance for cars with rebuilt titles.
Keep reading to discover everything you need to know about insuring cars with salvage and rebuilt titles.
- Vehicles with salvage titles can’t be insured or driven; they must be rebuilt and retitled as rebuilt to be insurable.
- Insurance for rebuilt title cars may be limited to liability coverage with some insurers, while others may offer full coverage.
- Insuring a car with a rebuilt title is generally more expensive, with premiums being 20% to 30% higher compared to cars with clean titles.
- Insurers require additional information, such as a certified mechanic’s statement and photos of the car, when insuring a vehicle with a rebuilt title.
What Is a Salvage Title?
A salvage title, also known as a branded title, indicates a car has been involved in a total loss insurance claim.
A normal car has a clean title. A clean title means the car has never suffered a serious accident, had the odometer altered, or had any type of discovered defect.
If a car is involved in a serious accident, however, it may be declared a total loss. To be declared a total loss, the cost of repairing the vehicle needs to exceed a certain threshold (typically 60% to 100% of the vehicle’s value, depending on state insurance laws).
After a car is declared a total loss, it receives a salvage certificate. That means the vehicle cannot be driven on public roads, nor can it be registered.
You cannot buy insurance for a car with a salvage title.
What Is a Rebuilt Title?
If you rebuild a car with a salvage title to a point where it’s driveable on public roads, then the car may receive a rebuilt title.
To receive a rebuilt title, the car must pass an inspection. A certified mechanic verifies the vehicle has been restored to a point where it can be safely driven on public roads. Although the car will never have a clean title, it now has a rebuilt title and can be driven on public roads.
Some cars require minor work to receive a rebuilt title. An older car may have minor body damage, for example, and was only declared a total loss because of the low value of the vehicle. In some cases, you can perform minor cosmetic repairs on the vehicle to receive a rebuilt title.
In other cases, vehicles require significant work to be road-worthy and receive a rebuilt title. Vehicles may require extensive suspension and interior work, for example, to pass inspection.
You can buy insurance for cars with rebuilt titles. In fact, if you plan to drive your rebuilt car on public roads, you must buy insurance.
How to Buy Insurance for Cars with Rebuilt or Salvage Titles
If you own a car with a rebuilt or salvage title, then you may want to buy insurance for that vehicle.
Here’s how insurance works for cars with rebuilt titles and salvage titles:
You Cannot Insure a Car with a Salvage Title: Vehicles with salvage titles cannot be driven on the road. You cannot buy insurance for a car with a salvage title. If you buy a car with a salvage title (say, at an insurance company’s auction), you must tow it to wherever it needs to go. You may want to tow the vehicle to a repair center, for example, to complete repairs and change the title to a rebuilt title.
You Can Insure a Car with a Rebuilt Title: If you restore a car with a salvage title to a point where it can be safely driven on the road, then you can receive a rebuilt title for the vehicle. The vehicle must pass an inspection. Then, your rebuilt title car can drive on public roads like any other car, and you can buy insurance for that vehicle like any other car.
You can buy insurance for rebuilt title cars. However, it’s not like buying insurance for a car with a clean title. Some insurers refuse to offer insurance for rebuilt title cars, while others only let you buy liability coverage instead of full coverage. Some of the car insurance companies that sell insurance for cars with rebuilt titles include USAA, GEICO, State Farm, and Progressive.
Rebuilt Title Car Insurance Versus Clean Title Car Insurance
You must insure a rebuilt title car if you want to drive legally on public roads. However, insurance works differently for rebuilt title cars than for clean title cars.
Some of the differences between clean and rebuilt title car insurance include:
Not All Insurers Cover Rebuilt Title Cars: You may struggle to find an insurer for your rebuilt title car. Some insurers only cover cars with clean titles. In most cases, you’ll need to use a non-standard insurance company. Even though your rebuilt car has passed inspection, there may be risks. Some mechanics overlook structural damage, for example, to increase profitability during the restoration process. Any car involved in a serious accident could also have hidden damage missed by mechanics and inspectors.
Full Coverage May Not Be Available: If you can find an insurer for your rebuilt title car, then you may not be able to buy full coverage car insurance. Some insurers do not offer full coverage car insurance on cars with rebuilt titles, for example. You can only buy liability coverage. Liability coverage protects others from damages and injuries you cause, but it does not cover your own vehicle. You can legally drive with liability coverage, but you would need to cover most damage to your own vehicle out of pocket.
Higher Premiums: It’s riskier to insure a car with a rebuilt title than a car with a clean title. Most insurers charge 20% to 30% higher premiums for cars with rebuilt titles compared to cars with clean titles. Instead of paying $900 per year for liability-only coverage, for example, you could pay $1,080 to $1,170 per year.
Extra Information Required: Insurers require extra information when insuring a car with a rebuilt title. Your insurer needs to verify your car has been genuinely repaired and inspected by a certified mechanic, for example. Your insurer also needs photos of your car. If your car is involved in a future accident, then the insurer will check these photos to verify new versus pre-existing damage. The insurer will cover new damage to your vehicle, but they will not cover pre-existing damage. Some of the extra information that may be required include:
- Certified mechanics statement to verify your rebuilt title car is safe to drive and has been repaired to operable condition
- Photos of your car, including photos (and possibly videos) of your vehicle and crucial components to be used as “before” pictures in any future claims
- An original repair estimate for your vehicle, which should come with the car when buying a salvage or rebuilt title car
Final Word – Insuring Cars With Salvage and Rebuilt Titles
You can insure a car with a rebuilt title, but you cannot insure a car with a salvage title.
Salvage title cars have been declared a total loss. They are not operable on public roads.
Once a salvage title car receives repairs and completes an inspection, it may receive a rebuilt title. You can buy insurance for cars with rebuilt titles. Cars with rebuilt titles are legal to drive on public roads.
Although you can buy insurance for cars with rebuilt titles, insurance may work differently. Insurers charge higher rates for rebuilt title cars, for example, and some insurers avoid insuring rebuilt title cars at all (or may only offer liability coverage).
However, by comparing quotes, contacting insurers, and providing insurers with the information they need about your rebuilt title car, you can find the best insurance for your rebuilt title vehicle.