Can You Get Full Coverage With a Salvage Title?

Last Updated on July 30, 2022

If you have a vehicle with a salvage title, then you may want full coverage car insurance for that vehicle.

Unfortunately, you cannot get full coverage car insurance for a vehicle with a salvage title. Your car may qualify for a rebuilt title after you refurbish and test it, but you cannot buy full coverage car insurance with a salvage title.

Keep reading to discover everything you need to know about getting full coverage with a salvage title.

Table of Contents:

• What Is a Salvage Title?
• How Do Salvage Titles Work?
• How a Rebuilt Title Works
• How Car Insurance Works with Salvage Titles and Rebuilt Titles
• Why Don’t Insurers Full Coverage Car Insurance to Salvage Titles or Rebuilt Titles?
• How to Get Insurance for a Rebuilt Salvage Title Car

What Is a Salvage Title?

A salvage title, also known as a branded title, is used to identify cars that were declared a total loss.

When a car is involved in a total loss accident, the cost of repairing the vehicle is more than the vehicle is worth. If the car is worth $20,000 and it would cost $30,000 to repair the vehicle, for example, then the car is considered a total loss.

Different states have different thresholds for total loss claims. Some states consider a vehicle to be a total loss when damages exceed just 60% of the car’s value, for example, while others require damage to be over 90% or 100% of the vehicle’s value. When making a claim, your insurance company will determine whether or not your vehicle is considered a total loss.

An ordinary vehicle has a clean title, which means it has never suffered serious damage. Cars with clean titles are also free of defects and have never had their odometers altered.

How Do Salvage Titles Work?

After your insurer declares your car a total loss, your vehicle receives a salvage certificate. Vehicles with salvage certificates cannot be registered, nor can they be driven on public roads.

Typically, insurers sell vehicles with salvage certificates to private companies – like salvage yards, auction groups, or rebuilders. Sometimes, the insurers sell the salvaged vehicle back to the original owner.

If you rebuild and repair your vehicle to a point where it can pass inspection, then your vehicle may receive a rebuilt title. Cars with rebuilt titles have greater allowances than cars with salvage titles.

How a Rebuilt Title Works

A rebuilt title, also known as an orange title in some states, indicates that a vehicle is eligible to be legally driven in your state after previously being involved in a total loss collision.

Rebuilt titles aren’t necessarily a bad thing. In fact, many cars with rebuilt titles have been restored to near-factory quality. These cars may continue to run safely for many years without issue.

Other cars with rebuilt titles, however, may not be smart buys. These cars may have significant damage under the surface. Some states have looser vehicle inspection restrictions than others.

Before buying a vehicle with a rebuilt title, perform your own inspection. Or, hire a qualified mechanic to inspect the vehicle on your behalf.

How Car Insurance Works with Salvage Titles and Rebuilt Titles

You cannot insure a vehicle with a salvage title because these vehicles are not eligible to be driven on public roads. You cannot register a vehicle with a salvage title, and you cannot buy insurance for that vehicle.

You can insure a vehicle with a rebuilt title. However, it may require more steps than insuring a vehicle with a clean title.

Many insurers provide liability insurance to vehicles with a rebuilt title. Liability insurance includes coverage for personal injury and property damage liability. Virtually all states require liability insurance to legally drive on public roads.

Most insurers do not provide full coverage car insurance to vehicles with a rebuilt title. Full coverage car insurance includes collision and comprehensive coverage.

Why Don’t Insurers Full Coverage Car Insurance to Salvage Titles or Rebuilt Titles?

No insurers provide full coverage car insurance to vehicles with salvage titles, and few insurers offer full coverage car insurance to vehicles with rebuilt titles.

There are several reasons insurers avoid vehicles with salvage and rebuilt titles, including:

• Vehicles with salvage titles cannot be driven on public roads, nor can they be registered, so insurers will not provide liability insurance or full coverage car insurance to vehicles with salvage titles
• Vehicles with rebuilt titles have been repaired to a point where they pass inspection, and some insurers offer liability insurance for vehicles with rebuilt titles; however, few insurers offer full coverage car insurance (including collision and comprehensive coverage) to vehicles with rebuilt titles
• Even if you can buy full coverage car insurance for your vehicle with a rebuilt title, you can expect lower insurance payouts; vehicles with rebuilt titles are worth around 30% less than vehicles with clean titles
• Many insurers are also wary of safety concerns; although vehicles with rebuilt titles have passed inspection, there may be unidentified issues that affect the safety of the vehicle – especially in states with weaker inspection standards

Insurance is all about risk. In the eyes of the insurance company, vehicles with salvage titles and rebuilt titles are higher risk to insure. Some insurers avoid rebuilt title cars entirely, while others only provide liability insurance.

How to Get Insurance for a Rebuilt Salvage Title Car

You can buy insurance for a rebuilt salvage title car.

If you have repaired your salvage title car to a point where it passes inspection and receives a rebuilt title, then you should be able to obtain liability insurance for that vehicle.

In fact, if you shop around, you may be able to obtain full coverage car insurance for that vehicle as well. Although most major insurers do not offer full coverage car insurance for vehicles with rebuilt titles, some specialty insurers or smaller insurers do offer this coverage.

Some tips for buying insurance for a rebuilt salvage title car include:

• Shop around for coverage. Some insurers do not insure rebuilt salvage title cars at all, while others are happy to insure your vehicle.
• Most insurers charge a premium when insuring rebuilt salvage title cars. You might pay 20% higher premiums than you would for a vehicle with a clean title, for example.
• Many insurers provide liability insurance to vehicles with a rebuilt title. However, most insurers do not provide full coverage car insurance.
• Even if you do obtain full coverage car insurance, you may receive 30% lower payouts from your insurance company after a loss involving a car with a rebuilt title. Cars with rebuilt titles tend to be 30% less valuable than cars with clean titles, which reduces your compensation after an accident or loss.
• You may need to provide extra information to your insurance company when insuring a vehicle with a salvage title. Most insurers require, for example:
  • A Certified Mechanic’s Statement: Most insurers require a certified mechanic’s statement before providing car insurance to a vehicle with a rebuilt title. This statement verifies the car is safe to operate.
  • Photos of the Vehicle: Insurers may require photos or videos of your vehicle. If you make a claim, your insurer may use these photos to spot any pre-existing damage, which would reduce your insurance claim.
  • Original Repair Estimate from Your Vehicle: Your rebuilt title vehicle should have an original repair estimate highlighting the necessary repairs. Your insurer may require additional proof that all repairs were performed.

Final Word on Full Coverage with a Salvage Title

You cannot get full coverage car insurance – or any type of car insurance – on a vehicle with a salvage title.

However, you can obtain liability insurance and full coverage car insurance on vehicles with a rebuilt title. If you repair your salvage title vehicle to a point where it passes inspection, then you may receive a rebuilt title and be able to buy car insurance.

Many insurers offer liability insurance for vehicles with rebuilt titles, although not all insurers offer full coverage car insurance.

Compare quotes today to find the best insurance options for your car with a rebuilt salvage title.