You can get car insurance whether you’ve been looking for the best deals on used cars or bought a brand new car off the lot. Although insuring a used or new vehicle is relatively easy, many people are curious if it is possible to insure salvage vehicles. When an insurance company declares a car a total loss, it will be given a salvage title. This is usually when the vehicle’s cash value exceeds the total loss threshold. The threshold is different for each state. In 2019, insurance companies were able to pay more than $62 million in physical damage claims.
A salvage title car may seem more appealing to you if you don’t drive often or have experience in auto repairs. A salvage title car may be one you have recently purchased that you want to restore and drive. You must have insurance if you plan to drive a salvaged car. It is sometimes more difficult to get insurance for salvaged vehicles, but it is possible.
What is a salvage car?
A salvage title car refers to a car that an insurance company has declared total loss. A vehicle must have been damaged beyond repair to be considered a total loss. A salvage certificate, which is issued when the vehicle is declared a total loss but has not been repaired, is common. Although state laws vary, it is usually issued at this time. An insurance company will usually take possession of the vehicle when this happens and then sell it to a mechanic who will use it for parts or repair it in order to resell it.
It is possible to purchase a salvaged vehicle from a dealer. This means that it will have been inspected and repaired for safe use on public roads. It is possible that a salvage car purchased from an auction may need some repairs. You should check with your state’s Department of Motor Vehicles to see what the requirements are to make it roadworthy.
A salvage title is required for any vehicle. It lets potential buyers know that it has sustained extensive damage or was declared total loss by insurance companies. If:
- Vehicle has been involved in an accident that required repairs beyond its actual cash value.
- The vehicle was damaged by a weather event such as a hurricane and the repair costs exceed the vehicle’s actual cash value.
- The vehicle was vandalized, and the repair costs exceed the actual cash value.
- Vehicle has suffered severe damage to the extent that it is unsafe and inoperable. This can usually exceed 70% of its value, and therefore the total loss threshold (which differs by state).
Tips to buy a salvage vehicle
Here are some tips for buying a salvage vehicle.
- When purchasing a salvage vehicle, make sure you are familiar with the state’s laws. This includes title requirements, insurance requirements, and lemon laws.
- To find out more about any accidents or damage, run the Vehicle Identification Number (VIN), through a service such as CarFax.
- Ask a mechanic to inspect your vehicle. They will give you a complete report about any damage and safety concerns.
Is it possible to insure a salvage car?
It may be difficult to obtain insurance for a salvage vehicle because every insurance company has its own policy. After a vehicle is repaired and checked for safety, it might be eligible for a rebuilt title, which allows you to get your state’s minimum coverage.
Some insurance companies might refuse to cover collision or comprehensive because they see salvage vehicles as too risky. An adjuster might ask for details about the damage to the vehicle and request that the company provide physical damage coverage. Additionally, your vehicle’s worth may be lower than the premium.
How to insure a salvage vehicle
These steps can be used to get insurance if you are looking to purchase a salvage vehicle.
- Take a look at the salvage vehicle. Thoroughly inspect the exterior and interior of the vehicle and note any damage or repairs for your records.
- Photograph the vehicle in its damaged state: If the vehicle is ever damaged again, it is worth taking photos to prove that the vehicle was in good condition at the time of purchase.
- A certified mechanic’s certificate: Have a mechanic complete a thorough inspection of your vehicle. After repairs are completed, request that the mechanic provide a written statement verifying that the vehicle is safe and in good working order.
- You can apply for a rebuilt vehicle title. Each state has its own application process, fees, and requirements.
- You can shop for coverage. Many companies offer liability insurance. You may want to compare quotes if you are looking for full coverage. It may prove costly to get physical damage coverage on a vehicle that has been salvaged. Many companies won’t offer full coverage as it is difficult to calculate a payout amount for future claims.
Is it possible to make a claim for a salvage car?
You can still make a claim if you have insurance on a salvaged car. The type of insurance you have will determine whether or not the company will pay for the claim. Most insurance companies only offer liability coverage. This does not include any coverage for physical damage to your vehicle.
It may be helpful to know that collision and comprehensive insurance will likely lower your vehicle’s worth than an unsalvaged one. Talk to your agent about the incident before you file a claim. This will help determine whether the payout is worth the consequences, such as an increase on your insurance premium.
