Can salvage title cars be insured?

Salvage title cars are not impossible to insure, but the process will not be a simple task. A car that receives a salvage title will not qualify for auto insurance unless it can become a rebuilt title vehicle. Trade-ins are also difficult for salvage title cars. Once a car receives a salvage title, it's worth decreases 20% to 40% from the Blue Book Value.

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Cynthia Lanctot is an insurance professional with ten years of industry experience. Cynthia is licensed in several states, and holds an associate in claims law, as well as a bachelor’s degree in English. Cynthia’s experience includes the New England and Northeast states. She currently works as a liability claims professional and an occasional online contributor.

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Reviewed by Cynthia Lanctot
Licensed Agent Cynthia Lanctot

UPDATED: May 10, 2022

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A Concise Overview

  • Salvage title cars cannot be insured unless they are repaired, pass inspection, and are issued rebuilt titles
  • Many are drawn to salvage title cars because of their affordability, but they also come with associated risks
  • A salvage title typically impacts a vehicle’s worth, bringing it down around 20% to 40% below market value

If you have a salvage title car, you’re probably wondering if it is eligible for salvage title auto insurance. The overall safety of salvage title cars can be questionable they are not always safe to drive on the road, even after they have been repaired enough to qualify for rebuilt titles.

We’re going to go over your coverage options when it comes to auto insurance for salvage title cars, as well as which auto insurance companies you should consider and more.

Before learning about the insurance possibilities for salvage title cars, you should explore all of your auto insurance options. Enter your ZIP code to get a free quote today.

Can you get insurance on a salvage title car?

A vehicle that receives a salvage title is not eligible for auto insurance. While it is not impossible, repairing a severely damaged vehicle to pass inspection can be time-consuming and expensive. In most instances, the only way a salvage title car can be insured is once it has been re-titled as a rebuilt title vehicle.

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What are salvage title cars?

Salvage title cars are vehicles issued certificates indicating that damage is excessive and repair expenses will be costly. These certificates are typically printed on blue paper. Once a salvage title car receives its label, it usually isn’t worth repairing, and it is no longer safe to drive on the road.

Another issue drivers may come across is that salvage title cars can be challenging to sell. If you have a salvage title car and you’ve had no luck getting your vehicle insured, trade-ins at a dealership can be just as complicated to achieve.

What is the difference between a salvage title and a rebuilt title?

While salvage titles are usually blue, rebuilt titles are usually orange. Rebuilt title cars are vehicles that have been repaired to meet requirements that can re-certify it as drivable. One of the most important things to remember about salvage title cars is that an inspection may be required before your newly rebuilt title vehicle can get back on the road, depending on which state you’re in.

What is the difference between a salvage vehicle and a total loss vehicle?

A vehicle that has damage beyond repair can be labeled as either a salvage title vehicle or a total loss. If the necessary repairs are made on a salvage title vehicle, it can be re-certified as a rebuilt title car. Unlike salvage title cars, once a vehicle has been labeled a total loss, there is very little chance of reviving it back to a drivable state. After a car is labeled a total loss, some auto companies will also not be able to offer a buyback. A buyback allows the vehicle-owner to purchase their vehicle after it was totaled. It is safe to say that when comparing the two, a salvage title vehicle has a greater chance of getting insured than a total loss vehicle. 

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How does a car become salvage?

There are several circumstances that could lead to the issuance of a salvage title:

  • It was involved in a collision. If your vehicle was involved in a multi-car crash, there is a significant chance it can become a salvage title vehicle.
  • It was damaged by harsh weather. If your vehicle was affected by extreme weather, such as a hurricane or severe rainstorm, it might result in a salvage title.
  • It is uninsurable. If you’ve gone to several auto insurance companies and none of them are willing to insure your vehicle, then it may be time to accept that it is now a salvage title car.
  • It has been vandalized. Defaced vehicles are likely to become salvage title cars.

It’s important to know that once salvage is stamped onto a vehicle’s title, you can no longer drive it on the road until it passes a series of tests to re-certify it as drivable.

Is it worth buying a car with a salvage title?

You usually get what you pay for with salvage title vehicles. Salvage title cars have attractive price points that may be appealing to those shopping on a tight budget, but can you put a price on safety? Since a salvage title vehicle has usually faced mistreatment that has compromised its structural integrity, all of its damage may not be visible at a glance. Is it worth buying a car with a salvage title if you don’t have to? Generally, no. While the cost of your vehicle may be within your budget, the repairs and the insurance cost may not be as affordable.

According to Kelley Blue Book, the average cost of auto insurance in the United States is around $1,633. If you have a salvage title car, you can expect to pay insurance rates higher than the national average. 

Can you register a salvage title car?

When it comes to registering a salvage title vehicle, there is no one-size-fits-all answer. Since each state has unique laws regarding what can and cannot occur with a salvage title vehicle, this can vary. However, most states will not allow a salvage title car to be registered until it can meet specific requirements. An inspection is required to ensure that a salvage title vehicle meets your state’s standards to redesignate it as a rebuilt title vehicle.

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How much does a salvage title affect a vehicle’s value?

So you just find out your car has a salvage title, and you come up with the idea to sell it. But once it is labeled a salvage title vehicle, you should know that its value automatically depreciates. According to Kelley Blue Book, the industry rule of thumb is to deduct 20% to 40% from the Blue Book Value to calculate how much the worth has decreased.

Auto Insurance Companies That May Insure Salvage Title Cars

21st Century

21st Century insurance has been proudly serving its insurance customers since 1958. The company received an A+ rating from A.M. Best for financial strength and an A+ rating from the Better Business Bureau (BBB). 21st Century exclusively provides auto insurance to the state of California.

GEICO

GEICO has been providing affordable insurance policies to its customers since 1936. The company received an A++ from A.M. Best for financial strength, an Aa1 from Moody’s, and an A++ rating from Standard & Poor’s. GEICO insures salvage title cars, and it has insurance policies available in all 50 states in the U.S.

Esurance

Esurance has been providing insurance policies since 1999. The company received an A+ rating from A.M. Best for financial strength, and J.D. Power rates the company’s auto insurance an 871 out of 1,000. Esurance provides auto insurance to 46 states, excluding Delaware, New Hampshire, Montana, and Vermont.

Everest

Everest is a reinsurance and insurance company that has been providing policies since 1973. The company received an A+ rating from A.M. Best for financial strength, an A1 from Moody’s, and an A+ rating from Standard & Poor’s. Everest provides auto insurance to 23 states, including Florida, Louisiana, Nevada, Oregon, Texas, Wisconsin, and West Virginia.

Infinity

Infinity is an insurance company that has been providing auto insurance since 1955. The company received an A- rating from A.M. Best for financial strength and an A3 from Moody’s. Infinity can offer the best car insurance for salvage title cars in 43 states in the U.S.

National General Insurance

National General Insurance was founded in 1920. It received an A- from A.M. Best and an A+ rating from the Better Business Bureau (BBB). National General Insurance provides auto insurance for all 50 states in the U.S.

Progressive

Progressive has been providing auto insurance since 1937. The company received an A+ (Superior) rating from A.M. Best for financial strength, an Aa rating from Moody’s, and an AA rating from Standard & Poor’s. Progressive can provide insure salvage title cars in all 50 states in the U.S.

Safeco

Safeco has been providing auto insurance since 1923. It received an A rating from A.M. Best for financial strength, and J.D. Power rated the company’s auto insurance an 872 out of 1,000. Safeco provides auto insurance for 47 out of 50 states in the U.S.

The General

The General has been providing insurance since 1963.  It received an A rating from A.M. Best for financial strength and an A+ rating from the Better Business Bureau (BBB). The General provides auto insurance for all 50 states in the U.S.

The Hartford

The Hartford was founded in Hartford, CT, and it has been providing insurance since 1810. The company received an A+ rating from A.M. Best for financial strength, and Standard & Poor’s rated the company’s insurance with an A+. The Hartford offers auto insurance policies in all 50 states in the U.S.

Are salvage title cars worth insuring?

Now that you know the advantages and disadvantages of attempting to insure salvage title cars, will you be giving it a try? Although it is possible, insuring a salvage title car is challenging because most insurance companies will not allow it. However, if you decide to go with one of the companies on the market that may insure your salvage title vehicle, you can expect to pay car insurance rates much higher than you would pay on average.

If the pros outnumber the cons, you should consider repairing your vehicle so it can obtain rebuilt title status. If you do, you should know that this process might be costly, and it won’t be a walk in the park.

If you just found out your car has a salvage title after buying it, you may be able to sue the seller for not disclosing this. Get advice from a qualified legal professional.

Don’t begin the process of insuring your salvage title vehicle just yet. Enter your ZIP code and receive a free auto insurance quote today.

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