Can You Insure a Car That Has a Salvage Title?

By: Garth Sundem  | 

A salvage auto may be harder to insure, but you still can -- and should -- get the right insurance policy.
A salvage auto may be harder to insure, but you still can -- and should -- get the right insurance policy.
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In short, yes: You can insure a car that has a salvage title. But don't expect the full meal deal. Most insurance companies offer liability insurance on salvage titles. That makes sense -- assuming your car passes the inspection necessary for registration, you're no more likely to hit anybody else just because your car has a salvage title. Your likelihood of causing damage isn't increased, so your property damage and bodily injury liability should be the same as it would be in a car with a clean title.

However, liability may or may not be the end of the line, depending on your state, your insurance company and the physical state of your salvage car. Many insurance companies offer collision coverage on salvage autos. The question is, do you want it? In the case of collision, most insurers pay only as much as 80 percent of the car's calculated market value. This means that if you total your salvage-title car, you'll only get 80 percent of its replacement cost [source: CarInsurance.com].

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Collision insurance premiums aren't likely to be any higher for a salvage auto. Again, this makes sense. It's not like repairing a salvage car would be any more expensive than repairing a similarly damaged, clean-title car -- but for the same premium, you get less. Is it worth it? The choice is up to you.

Finally, most insurers don't offer comprehensive insurance on salvage autos. This type of insurance covers any repairs (after meeting a deductible), so it functions almost like a warranty (minus that pesky deductible thing). Because most agencies that would loan you money for a car require comprehensive insurance, your inability to get this type of insurance on a salvage-title car likely means you'll have to pay cash for it.

For more great information, check out the links on the next page.

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Originally Published: Jun 15, 2011

Insure Salvage Car FAQ

Do salvage titles cost more to insure?
Vehicles with salvage titles may cost more to insure; it depends on your insurer and the type of coverage you can get. Most salvage vehicles (or their drivers, really) can only carry liability coverage. However, in some states, they may be able to get collision insurance, too.
Does a salvage title affect your insurance?
A salvage title shouldn't affect your ability to get insurance, but it will affect the types of insurance policies you're able to purchase. Liability insurance should be no problem. However, collision insurance options vary.
Can a salvage car be totaled again?
A salvage car can actually be totaled again. However, if it is totaled, your insurance company will likely pay you far less than its full value.
Can a salvage title be cleared?
Yes — and in most states, it'll need to be cleared. Most states consider cars with salvaged titles to be unsafe or unfit to drive, which means you cannot have the cars on the road. You'll need to perform repairs and pass state inspection in order to get rid of a salvage title. However, even once this occurs, you'll likely still carry a "rebuilt" or "salvage" designation for the remaining years you own the vehicle.
Is it a bad idea to buy a salvage car?
Salvage cars come with pros and cons. They can often be purchased at a very low cost, but you'll have to spend money in order to repair the vehicle so it's safe and meets state standards.

Lots More Information

Related Articles

  • CarInsurance.com. "Insurance Coverage Definitions/Car Insurance Coverage." QuinStreet Insurance Agency. (June 5, 2011) http://www.carinsurance.com/CoverageDefinitions.aspx
  • Sloan, Jim. "How to avoid problems with salvaged vehicles." Insure.com. Aug. 18, 2010. (June 5, 2011) http://www.insure.com/car-insurance/salvaged-cars.html

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