Salvage Title Auto Insurance

Salvage title auto insurance may be hard to find due to the car's history. Liability insurance for a salvage car is easier to get, but only some insurers will sell full coverage. If your salvaged car is totaled, an insurer will probably only pay out 60 to 80% of its market 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

UPDATED: Jul 16, 2021

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Food for thought

  • Auto insurance for salvage cars may be expensive and hard to find.
  • A vehicle that has been deemed “totaled” by an insurer, can be rebuilt and re-titled.
  • Changing a salvage title to a clean title is considered fraud.

Whether restoring the cars or buying it from someone else at discount, people are driving salvage cars. A salvage vehicle by definition presents a higher risk, especially if the restorer is not experienced and highly knowledgeable. Buyers could end up with a high cost of repair or a car that isn’t drivable. Compared to the average cost of a similar car without a salvaged title, though, they can also be a financial steal.

Once you’ve decided on a car, the next step for a vehicle owner is insurance. No matter what you’re driving, you need insurance that meets state minimums. Drivers have options when choosing an insurance company and policy. Just know that there will be limits.

The first rule of the game is simple. A salvaged title vehicle has to have a rebuilt title. You have to prove it’s safe to be on the road. Otherwise, it cannot be registered, driven on public roads, or insured. Once you meet this standard, know most insurers won’t offer collision or other coverage for your car. You can buy the state-required liability protections. Insurance companies are typically wary of salvage cars in that they don’t know if damages are from the current accident or an accident that totaled the car the first time. If you do find full coverage for a salvage vehicle, be prepared to pay a higher premium.

Does Geico insure salvage title cars, or what about how to buy auto insurance from Progressive for a salvage title? We can help. Enter your ZIP code above to get FREE quotes from multiple insurers for your salvage car.

Where Can Salvage Title Vehicle Owners Find Affordable Policies?

First off, is insurance more expensive for salvage cars? The simple answer is yes. Whether or not it’s officially rebuilt, a salvage car is a minefield in an insurer’s eyes. Basic questions about the safety and reliability of a car as well as repairs after even a minor incident are key concerns.

When it comes to a salvage title, car insurance companies can be hesitant, especially for comprehensive coverage. The best way to find competitive rates and coverage is by getting multiple quotes and comparing them side by side.

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What Are the Minimum Coverage Requirements for Salvage Cars?

No matter what else, you have to carry the state minimum requirements for liability car insurance to legally drive. The table below shows these requirements for each state.

Minimum Liability Auto Insurance Requirements by State
StateInsurance required Minimum liability limits
ALBI & PD Liab25/50/25
AKBI & PD Liab50/100/25
AZBI & PD Liab15/30/10
ARBI & PD Liab, PIP25/50/25
CABI & PD Liab15/30/5
COBI & PD Liab25/50/15
CTBI & PD Liab, UM, UIM25/50/20
DEBI & PD Liab, PIP25/50/10
DCBI & PD Liab, UM25/50/10
FLPD Liab, PIP10/20/10
GABI & PD Liab25/50/25
HIBI & PD Liab, PIP20/40/10
IDBI & PD Liab25/50/15
ILBI & PD Liab, UM, UIM25/50/20
INBI & PD Liab25/50/25
IABI & PD Liab20/40/15
KSBI & PD Liab, PIP25/50/25
KYBI & PD Liab, PIP, UM, UIM25/50/25
LABI & PD Liab15/30/25
MEBI & PD Liab, UM, UIM, Medpay50/100/25
MDBI & PD Liab, PIP, UM, UIM30/60/15
MABI & PD Liab, PIP20/40/5
MIBI & PD Liab, PIP20/40/10
MNBI & PD Liab, PIP, UM, UIM30/60/10
MSBI & PD Liab25/50/25
MOBI & PD Liab, UM25/50/25
MTBI & PD Liab25/50/20
NEBI & PD Liab, UM, UIM25/50/25
NVBI & PD Liab25/50/20
NHFR only25/50/25
NJBI & PD Liab, PIP, UM, UIM15/30/5
NMBI & PD Liab25/50/10
NYBI & PD Liab, PIP, UM, UIM25/50/10
NCBI & PD Liab, UM, UIM30/60/25
NDBI & PD Liab, PIP, UM, UIM25/50/25
OHBI & PD Liab25/50/25
OKBI & PD Liab25/50/25
ORBI & PD Liab, PIP, UM, UIM25/50/20
PABI & PD Liab, PIP15/30/5
RIBI & PD Liab25/50/25
SCBI & PD Liab, UM, UIM25/50/25
SDBI & PD Liab, UM, UIM25/50/25
TNBI & PD Liab25/50/15
TXBI & PD Liab, PIP30/60/25
UTBI & PD Liab, PIP25/65/15
VTBI & PD Liab, UM, UIM25/50/10
VABI & PD Liab, UM, UIM25/50/20
WABI & PD Liab25/50/10
WVBI & PD Liab, UM, UIM25/50/25
WIBI & PD Liab, UM, Medpay25/50/10
WYBI & PD Liab25/50/20
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If you’re a little confused by all these numbers, don’t worry. Many drivers want an expert to guide them, and it starts before you sign up for insurance. If you’ve never owned a salvage car before or have moved to a new state, always let an expert in salvage title laws guide you through the process. All salvage cars should be rebuilt and pass safety inspection before being registered with a salvage title. Filling out your title application correctly is key. Then you can move onto insurance.
If you look at the numbers above, the first two letters are the state. So the state of California requires both bodily injury and property damage liability coverage of 15/30/5. In other words, you must have:

  • $15,000 for any one person injured in one accident
  • $30,000 in coverage for all people injured in one accident
  • $5,000 for property damage

If you’re getting insurance for a restored title in AZ, the requirements are the same except for the property damage coverage. Arizona state requires $10,000. 

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How Does Extensive Damage Affect a Car’s Value?

This table covers the differences between salvage, clean, and rebuilt titles.

Types of Vehicle Titles and Their Details
TITLE TYPECOLOR OF TITLEISSUING FACTORSPROSCONS
SALVAGE TITLEBlueIssued for vehicles whose damages exceed the value of the vehicleUsually very cheap to purchaseNo insurance available, can't be driven legally, and repairs can be costly
CLEAN TITLEGreenIssued for new or used vehicles with little to no damageNo damage or repairs to deal withMost expensive upfront cost
REBUILT TITLEOrangeIssued for vehicles that were salvaged but have been repaired and passed an inspectionCheaper than a new or used car to purchaseCan be driven legally but can be hard to find more than liability insurance
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Once a vehicle has been totaled out by an insurer, it can be rebuilt and re-titled with the proper salvage inspection and repairs. But the industry typically estimates that salvage vehicles lose 20 to 40 percent of their Kelley Blue Book value over a clean title.

What does that mean for your auto insurance?

If you do find an insurer who is willing to sell full coverage car insurance for your salvage car and you get into an accident, the insurance payout on a salvage title car may be only 60 to 80 percent of the market value of the vehicle. The insurer may also be unwilling to pay for more extensive repairs as they may be from the original accident. For this and other reasons, salvage title car insurance claim settlement can be more complex.

This video from Donut Media goes over salvage titles.

Though you might save on the salvage car on the front end, you might end up paying for it in the end.

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How Do You Clear a Salvaged Title?

Can you clear your salvaged car and get a clean title for it? The answer to that is no. Registering a salvage car under a clean title is considered fraud. But you might be able to fix it and get a rebuilt title, which opens up a lot of options for you.

But changing a salvage title to a clean title is considered to be fraud.  CarFax defines title washing as fraudulently changing a title’s status so that the history of the car is wiped out.

This leads to previously totaled-out cars being given a clean title.

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Why Don’t Insurance Companies Want to Cover Salvage Title Cars?

Unfortunately, many previously totaled cars are not structurally sound. Restorers repair the obvious, but even a small hidden leak can do a lot of damage. When you’re talking about flood damage from a natural disaster, it’s impossible to know what all the water damaged.  Even if a part is deemed acceptable after the initial incident, it may not hold up for long.

The National Motor Vehicle Title Information System tracks five factors that help reduce “title washing.” These are:

  1. The current state of the title and its last date
  2. The brand history
  3. The odometer reading of the vehicle
  4. Totaled out loss history
  5. Salvage History

These steps help prevent title washing which happens to 57,000 vehicles every year, according to GovInfo.

What Companies Offer Salvage Title Auto Insurance?

In complicated situations like this, insurance agents can provide unique expert advice. In some cases, insurance policies may cost you more, but you get the extra assurance of an extra set of eyes looking over your coverage and educating you.

Geico is one of the primary carriers that offers comprehensive insurance policies for rebuilt cars. The company assesses each case individually before making an underwriting decision. Factors such as previous damage and the type of damage are deciding factors. Some insurers may also look at the insured’s credit score and evaluate the certificate of title.

If you’re looking for the best coverage for your salvage car, we are here for you. Enter your ZIP code below to get FREE quotes from multiple insurers today.

References: 

  1. https://www.kbb.com/company/faq/values/
  2. https://www.carfax.com/press/resources/what-is-title-washing
  3. https://vehiclehistory.bja.ojp.gov/
  4. https://www.govinfo.gov/app/details/CHRG-109hhrg27254/context

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