Auto Insurance For Salvage Vehicles

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Here's what you need to know...
  • It is easy to get liability insurance for a salvage vehicle
  • Comprehensive and collision insurance can be a problem depending on the insurance company rules
  • Insurance companies that offer collision insurance on salvage vehicles often impose strict value limits
  • Salvage vehicle insurance premiums are generally higher than those for typical cars


Salvage vehicles are those cars which have been deemed by an insurance company to be a total loss and then rebuilt or repaired to sell. Often, the car was in a collision and sustained excessive damage, but it can also mean that it was in a flood, stolen, or vandalized.

When doing a search for a new vehicle, if you come across a car that has a price which seems too good to be true, question the seller about the status of the title. You may find that the vehicle has a salvage title and the owner was hoping no one would question that fact.

Being aware of the vehicle’s title status and history is imperative, as this information has implications for the vehicle’s mechanical and structural longevity as well as for obtaining insurance to cover it completely.

Buying a salvage vehicle can offer a driver bargain; however, it typically comes with some extra hoops to jump through, and you may not be able to cover it with insurance as well as you would like.

One additional concern to note is that most lenders will not offer you a loan on a vehicle with a salvage title, meaning you will probably have to pay the seller in cash for a salvage vehicle.

Still, a salvage vehicle can be a great value for owners that are ready to deal with the documentation, inspections, and any repairs that might be imminent.

Buying auto insurance for salvage vehicles is a process, so we want to share these tips with you before you make your purchase!

Enter your zip code into our FREE comparison tool to start shopping around today!

Tips for Buying a Salvage Vehicle

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When considering a salvage vehicle, some things may make a large difference in the value of the vehicle, costs for repairs down the line, and the cost of insuring your new to you car! Let’s take a look at what you need to know to get the best value and least hassle overall.

There are many types of damage that might brand a car as salvage; it is not always collision damage. Flood damage is sometimes noted on a title, but most often the title simply states salvage title.

Likewise, hail damage and cars that are recovered after a theft and cars that are vandalized can all be branded as salvage if the insurer decides to declare a total loss.

In some states, any car that is stolen receives a salvage title — Florida, Arizona, Illinois, Maryland and New York among them. Of course, these cars are often still in good shape or easily repairable.

Non-repairable title branding means that the state most likely will not allow the car to be fixed and registered. Vehicles with this title branding are only to be sold for parts or destroyed. Run, don’t walk, if someone tries to sell you a non-repairable vehicle!

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In some states, getting a legal title requires lots of documentation.

For instance, the DMV in California requires a title application that shows the cost of all the repairs done to the salvaged vehicle, proof of ownership, an inspection certificate from the California Highway Patrol, and a brake and light inspection certificate.

Ordering a vehicle history report from the National Motor Vehicle Title Information System can help ferret out salvage title issues from other states that are relatively hidden.

How to Buy Auto Insurance for Salvage Vehicles

Because people who drive a salvaged vehicle are not more likely to hit someone else when driving, most car insurance companies will readily sell you a liability insurance policy for your car.

Additional coverage might be available, depending on the state where you live, the shape of your salvaged car, and the insurance company.

Only you can decide if the coverage that you can purchase for your vehicle is enough for your financial situation.

The cost of the vehicle itself is much less, but you will probably have to settle for a much lower payout from your insurance company if you have a loss on the vehicle.

Though lots of insurance companies offer collision coverage on salvaged autos, limited coverage is fairly standard with salvage vehicles; from excluding coverage for the initial damage to the car, or lowered payout limits.

Most insurance companies will pay only 80 percent of the replacement cost for a similar vehicle, so having some cash reserves is necessary.

Because each state regulates salvage vehicles and car insurance differently, coverages car vary widely. You need to know what the laws are in your particular state.

You probably will need to provide safety and mechanical inspection documentation to your insurance company before buying a policy, which might also be necessary to register the vehicle at your local DMV.

Be sure that you know why the car was totaled and what the branding on the title says, as the insurance company will want this information. Getting a copy of the accident report, if applicable, can speed up the process of getting the car insured.

Be aware that some auto insurance companies will insure vehicles declared a total loss by other companies, but not those they have totaled themselves.

Do not expect to obtain comprehensive insurance for your vehicle; most insurance companies do not extend comprehensive coverage to salvaged autos.

Always do your comparison shopping to make sure you get the best coverage and the best pricing for your salvage car.

Overall, buying a salvage vehicle can be a good value. However, it takes some research skills and some extra steps to make sure exactly what you are getting for your money, and that you will be able to insure it adequately for your needs.

Start comparison shopping today to make sure you get the right coverage for the right price. Enter your zip code into our FREE tool below to get started!

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