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Car Insurance for a Salvage Title

Image of stressful man sitting in front of a broken car after traffic accident on the road
Here's what you need to know...
  • Salvage titles are sometimes difficult to find insurance coverage for
  • Your current insurance company may not cover a salvage title, so be sure to check with them before you make any decisions
  • If you are looking for insurance coverage, you may only find liability for your salvage car
  • In some cases, your car may be considered a restored classic rather than a salvage title
While you can obtain auto insurance for a salvage car title, you need to know the risks and understand who is willing to cover them.

A salvage car is a car that has been deemed by an insurance professional to be so damaged from an accident or vandalism that the market value is 30 percent or less of the blue book value of the same vehicle in prime condition.

You can find your particular salvage title insurance value by contacting your car insurance company.

Most people, when an accident occurs, will allow the towing company to take their vehicle to a local mechanic, or in some cases an appraisal center, for the insurance company to appraise the damage.

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If the vehicle is considered totaled — which makes it a salvage vehicle — the majority of people take their belongings and allow the company that is storing the vehicle do with it what they will.

Others choose to take the vehicle with them in hopes of repairing it themselves.

What do those companies do with salvage cars left to them? The answer to that depends on how bad the damage is.

If the body is in terrible shape but the engine is fine, they may sell the motor right out of the vehicle. They may also take the whole thing apart and sell it for parts.

There are also those instances that allow for some repair, even if the insurance company deems it a lost cause, and these companies may choose to fix the whole thing and sell it to a new customer.

Finally, they may sell the whole thing as is, allowing their customer to take responsibility for the vehicle and its repairs.

You Can Get Insurance for Your Salvage Title Car

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Have you ever wondered whether insurance companies would be willing to cover your salvage car?

You may not be able to get covered for a salvaged vehicle from your current auto insurance company.

Many insurance companies will not insure salvage title cars; if your insurance company is one that doesn’t provide this insurance, then you will want to shop around for other alternatives.

One of the things to be aware of is that most insurance companies that do offer salvage title insurance will not offer much in the way of coverage.

If you are looking to insure a salvage title vehicle, there are a couple of things you should consider.

First of all, most will not provide more than liability coverage for the vehicle.

If you were hoping for a comprehensive plan, depending on what state you live in, you would probably be out of luck.

If you are concerned about theft, you may want to invest in a storage space for your salvage title vehicle.

Also, if your intention is to repair and fix up your salvage car, you need to understand, with some exceptions, that the value will always be considered at that 30 percent (or less) it was figured at when the vehicle was in the accident.

As you probably surmised, for every rule there is an exception.

Most insurance companies will make an exception for any classic car (or truck) that has been appraised by a professional and announced in a specific condition.

Once an expert verifies a vehicle, the insurance company will also send an agent (or appraiser) to look at the vehicle as well. You will be required to get special plates for the car declaring it a restored classic.

Find out if you will be able to get salvaged title insurance by contacting your car insurance company. They will know the best process for obtaining the title.

There are some insurance companies who will also consider a non-classic restored vehicle for additional appraisal.

However, regardless of the new appraisal, because the vehicle has been in an auto accident, it will never have the value of a vehicle of the same type that has never been in an accident.

When You Need Insurance for a Salvage Title Car

Now that you know you can get car insurance for your salvage title, the question then becomes, should you get that insurance?

There is no single answer to this issue, as there are some factors that need to be considered before you can determine the need. Salvage car insurance can be a great thing, but it is up to you the best route to take.

Every state has different laws about the vehicles that you own.

Some states allow you to skip purchasing insurance as long as your vehicle is on blocks, and you provide a letter stating that it isn’t being driven while it is being restored.

Other states require you to turn your license plate in for the vehicle and pay the fees to reinstate it once you are ready to insure your vehicle.

You will need to consider how long you plan on driving a salvage title car and which insurance companies will properly cover you!

There are some states that require any registered vehicle to have the minimum coverage of auto insurance.

Most states will work with you, but it is important to know and understand your state’s laws.

It would be a shame to have your vehicle impounded and incur fees on a vehicle that you aren’t even driving.

Also, if the salvage vehicle was yours in the first place and you still owe money on it after the insurance company has paid you for the loss of the vehicle, you need to negotiate with your lender the release from carrying full coverage on the vehicle (which is in your loan contract).

Most banks will release you from that requirement as long as the vehicle isn’t running, but you must ensure that you contact them with the details of why you want to drop full coverage and get their permission.

Of course, if you are driving the salvage title vehicle, then you must obey your state’s laws regarding the purchase of auto insurance.

If you make a decision to repair a vehicle that your insurance company has deemed totaled, you need to speak to your agent and determine their policy on repairing totaled vehicles.

Some companies will penalize you for the repair.

It is always important to understand the rules and policies of your insurance company, or you could end up paying a lot more than you bargained for.

The Cost of Salvage Title Insurance

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Fortunately, the cost of insurance for a salvage title vehicle will be about the same price as it would for a regular vehicle.

However, just like any other type of auto insurance, it is important that you shop around to get the best deal.

If you are driving a salvaged car, you should compare quotes to find the best rates.

With a free car insurance rate quote tool, you can compare the rates of several companies all in a single session.

You simply answer a few questions about your driving history, age, where you live, and a few other things, and we will get you instant quotes from several reputable auto insurance companies.

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