Auto Insurance For Salvage Vehicles

Salvage vehicles are considered a total loss by auto insurance companies then repaired to sell. The average rates for liability car insurance is $42.78/mo (most companies won't offer comprehensive).

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance...

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Reviewed byDaniel Walker
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UPDATED: May 8, 2020

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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’s 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.

What does it mean if a car has been salvaged?

Salvage vehicles are those cars that 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 serious collision, but it could also have been severely damaged by something like a flood or vandalism.

Once an insurance company decides the cost of repairs is greater than the worth of the vehicle, it is declared a loss, and the claim is paid out.

Then the insurance company sells the car to a repair company to be rebuilt if the damages are not too severe, or sometimes you can buy your car back from the insurance company.

Make sure you know the vehicle’s history when buying a car with a salvage title because it can affect how much insurance a company will allow you to purchase. Vehicles that are heavily damaged may have fewer coverage options and lower claim payouts.

Enter your ZIP code into our FREE comparison tool to start shopping around today.

How to Buy Auto Insurance for Salvage Vehicles

Buying auto insurance for a vehicle that was salvaged is not impossible. Although companies may limit the coverages available and limit payout amounts depending on the original damage to the car, you can generally find a company that will offer you coverage.

What kind of coverage can you get on a salvage car?

Most states require that you at least carry liability insurance on your vehicle. You will need to check with an agent in your state to determine the amount of liability insurance and any additional coverages that are required.

Because people who drive a salvaged vehicle are not more likely to cause an accident than anyone else, most car insurance companies will readily sell you a liability insurance policy for your car.

Liability insurance will cover any damages to other vehicles, property, and people in an accident that you cause, up to a certain amount. It will not cover any damages to your vehicle or people in your car.

Companies will generally also offer collision, comprehensive, and personal injury protection (PIP) coverages, as well as others, but they may not offer them on a rebuilt vehicle.

Shopping around for car insurance on a rebuilt vehicle is a must, not only to get the coverage you want but to get it at a great price. Take a look at how rates in your state might affect the cost of these different types of coverage.

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This video gives you some information you will need on how to get insurance on a car with a rebuilt title.

The National Association of Insurance Commissioners (NAIC) collects data regarding insurance rates. We will use that data to give you some idea of rates for different types of coverage nationwide. One thing to note is that your rates will vary based on many different factors, like your age and driving history. However, these numbers will give you a baseline.

This table will show you the five year average of the cost of liability insurance by state. Search for your state in the box below to see the average where you live.

Average Liability Car Insurance Rates by State
StateAverage Liability
Rates by State
Alabama$372.57
Alaska$547.34
Arizona$488.59
Arkansas$381.14
California$462.95
Colorado$477.10
Connecticut$633.95
Delaware$776.50
District of Columbia$628.09
Florida$845.05
Georgia$490.64
Hawaii$458.49
Idaho$337.17
Illinois$430.54
Indiana$372.44
Iowa$293.34
Kansas$342.33
Kentucky$518.91
Louisiana$727.15
Maine$333.92
Maryland$599.48
Massachusetts$587.75
Michigan$722.04
Minnesota$439.58
Mississippi$437.38
Missouri$399.41
Montana$387.77
Nebraska$349.07
Nevada$647.07
New Hampshire$393.24
New Jersey$865.55
New Mexico$462.21
New York$784.98
North Carolina$357.59
North Dakota$282.55
Ohio$376.16
Oklahoma$441.57
Oregon$553.43
Pennsylvania$495.02
Rhode Island$720.06
South Carolina$497.50
South Dakota$289.04
Tennessee$397.73
Texas$498.44
Utah$471.26
Vermont$340.98
Virginia$413.12
Washington$568.92
West Virginia$501.44
Wisconsin$359.84
Wyoming$323.38
Countrywide$516.39
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How did your state do against the national average of $516.39? Are you lucky enough to live in one of the states with a lower-than-average rate, or do you live in a state that pays above the national average?

Of course, these numbers have changed over time, but this gives you a good idea of the cost of liability insurance in your state.

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

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 to lower payout limits for a new claim.

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 can vary widely. You’ll need to know what the laws are in your particular state to get the best deal on the correct coverage.

Now we’re going to show you the average cost of additional coverages by state. We’ll look at collision and comprehensive coverages specifically.

Search for your state in this table that shows you the average rates for collision insurance. Collision coverage is a great add-on since it will cover damages to your car if an accident occurs.

Average Collision Car Insurance Rates by State
StateAverage Collision
Rates by State
Alabama$299.10
Alaska$360.18
Arizona$259.31
Arkansas$304.87
California$364.56
Colorado$263.36
Connecticut$348.70
Delaware$296.60
District of Columbia$449.27
Florida$251.30
Georgia$320.45
Hawaii$297.75
Idaho$209.00
Illinois$284.92
Indiana$237.19
Iowa$207.10
Kansas$251.46
Kentucky$255.33
Louisiana$391.03
Maine$249.00
Maryland$331.72
Massachusetts$358.68
Michigan$383.21
Minnesota$214.02
Mississippi$302.96
Missouri$259.65
Montana$254.90
Nebraska$223.50
Nevada$293.78
New Hampshire$281.70
New Jersey$365.23
New Mexico$267.48
New York$358.45
North Carolina$264.58
North Dakota$227.44
Ohio$252.21
Oklahoma$298.21
Oregon$212.47
Pennsylvania$307.31
Rhode Island$377.06
South Carolina$247.62
South Dakota$200.10
Tennessee$290.39
Texas$340.51
Utah$254.41
Vermont$278.38
Virginia$264.70
Washington$250.13
West Virginia$319.10
Wisconsin$209.93
Wyoming$270.48
Countrywide$299.73
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South Dakota has the lowest average for collision insurance at just $200.10. The District of Columbia has the highest at $449.27, which more than doubles South Dakota’s rate. It is also $200 higher than the countywide average.

Let’s look at the state averages for comprehensive coverage. Comprehensive coverage is nice to have since it acts almost like a warranty and covers repairs to your car not caused by an accident, like a transmission repair. But it’s extremely hard to get comprehensive coverage on a rebuilt car.

Average Comprehensive Car Insurance Rates by State
StateAverage Comprehensive
Rates by State
Alabama$146.28
Alaska$141.08
Arizona$184.20
Arkansas$183.36
California$99.29
Colorado$158.34
Connecticut$126.02
Delaware$113.23
District of Columbia$230.25
Florida$110.12
Georgia$153.61
Hawaii$100.09
Idaho$110.78
Illinois$117.98
Indiana$115.02
Iowa$171.58
Kansas$225.34
Kentucky$130.15
Louisiana$208.59
Maine$96.66
Maryland$146.77
Massachusetts$128.92
Michigan$147.02
Minnesota$173.04
Mississippi$194.74
Missouri$166.34
Montana$199.87
Nebraska$206.24
Nevada$116.79
New Hampshire$103.03
New Jersey$123.18
New Mexico$166.89
New York$156.66
North Carolina$123.00
North Dakota$227.64
Ohio$112.74
Oklahoma$201.56
Oregon$89.66
Pennsylvania$132.01
Rhode Island$122.17
South Carolina$165.38
South Dakota$228.59
Tennessee$135.62
Texas$186.70
Utah$106.57
Vermont$118.31
Virginia$129.89
Washington$104.11
West Virginia$195.04
Wisconsin$126.34
Wyoming$222.86
Countrywide$138.87
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Oregon, Maine, and California all had rates under $100. The District of Columbia was again the highest at $230.25, almost $100 higher than the national average.

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

What else do you need to know about salvage car insurance?

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.

What limitations will you have driving your rebuilt car?

Although there are no legal limitations to driving a rebuilt car, many services like Uber and Lyft will not allow their drivers to drive a car that has been salvaged.

Some delivery services like Postmates and Doordash do not specify what type of vehicle must be used, so a car with a rebuilt title would be fine.

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How do you know if a car was salvaged?

When doing a search for a new vehicle, if you come across a car that has a price that 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 ask about this.

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.

Once a vehicle with a salvaged title is repaired, it can then be issued a rebuilt title. This will usually require an inspection to be completed before the car is deemed driveable. States can also require additional documentation before issuing a rebuilt title.

Let’s look at the different title options available.

 Clean TitleSalvage TitleRebuilt Title
Issuing FactorsIssued for new or used vehicles with little to no damageIssued for vehicles whose damages exceed the value of the vehicleIssued for vehicles that were salvaged but have been repaired and passed an inspection
ProsNo damage or repairs to deal withUsually very cheap to purchaseCheaper than a new or used car to purchase
ConsMost expensive upfront costNo insurance available, can't be driven legally, and repairs can be costlyCan be driven legally but can be hard to find more than liability insurance
Color of TitleGreenBlueOrange
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The table above shows you the differences between clean, salvage, and rebuilt titles.

Cars with clean titles have no major repairs needed, but that can cause the purchase price to be high. These cars should be the most expensive but the easiest to deal with.

Salvage cars are very cheap upfront, but they will require extensive repairs.

The repairs need to be done by an expert to ensure there are no safety issues. The labor and parts can be very costly.

Rebuilt cars can be a headache and will be very costly if repairs are not done completely and correctly. However, if the repairs are done correctly, the vehicle will be a good deal. You need to be very careful if you’re thinking about buying a rebuilt car.

The titles are also printed on different colored paper, depending on their status. Clean titles are generally green, salvage titles are blue, and rebuilt titles are orange. This can vary depending on your state.

Cars that have been rebuilt can save you money on the purchase price but can be costly if all the repairs are not completed properly.

Let’s get into some of the finer details about buying a salvaged car.

Why would you want a salvaged car over a new or used car?

A salvaged car will usually come at a bargain; however, there will also be 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 and rebuilt vehicles is a process, so we want to share some tips with you before you make your purchase.

Tips for Buying a Salvage Vehicle

When considering a salvage vehicle, there are some factors that 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.

This video shares some information on buying a car with a salvage or rebuilt title.

No matter what car you’re buying, it’s important to do your research. Here are a few factors to consider when looking at a rebuilt car:

  • Run a vehicle report on the VIN for the car to see what damages have been reported.
  • Ask the seller why the vehicle was salvaged.
  • Ask for a detailed list of repairs that were completed and find out who completed them.
  • Have the vehicle checked by a mechanic you trust.
  • Speak with insurance companies to find out what type of insurance they will offer you.

Even though buying a rebuilt car can seem like a steal, if you don’t do your research, it can turn into a money pit.

What kinds of damage will cause a car to be labeled salvage?

There are many types of damage that might brand a car as salvage beyond just collision damage. Some different reasons a car might be salvaged are:

  • Flood damage
  • Hail damage
  • Fire damage
  • Theft
  • Vandalization
  • Heavily used taxis
  • Law enforcement vehicle
  • Returned under warranty or lemon laws

That is a long list of items to look out for when purchasing a salvage or rebuilt title. It’s important to take your time and look closely at the car. You don’t want to be surprised by any extensive damages found after the purchase.

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.

Flood damage is very hard for a car to recover from. Often where there has been a hurricane or other natural disaster, the used car market will be inundated with vehicles with extensive flood damage.

That’s why it’s important to run a report about the car from a trusted source like Carfax or Autocheck.

This video will give you insight into the damages a flood can cause and reasons to stay away from flood-damaged cars.

Sometimes the damage to a vehicle is too extensive for it to be repaired and resold.

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 if someone tries to sell you a non-repairable vehicle!

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How do you get your salvaged car titled?

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

This video walks you through what it takes to get a rebuilt title in Ohio. You’ll see that there are many steps to the process.

Each state will have its own rules and laws for taking a salvage title to a rebuilt title.

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.

What are the procedures involved in a rebuilt vehicle inspection?

Each state also has its own requirements when it comes to allowing a rebuilt car to be driven on public roads. Physical inspections are a requirement but the location and inspectors vary from state to state. All states require applications and physical inspections, but some states go even farther.

These are just a few examples:

  • Nevada – If the vehicle is five model years old or newer, the vehicle must be inspected before any repairs are made. After the repairs are complete, an application is needed, along with a certificate of another inspection.
  • Tennessee – In order to receive a rebuilt title, the owner must show the salvage certificate, color photos of the vehicle before repairs, and receipts for all replacement parts, plus complete inspection and pay fees.
  • Georgia – You must have an original salvage title, photos of the damaged vehicle before repairs, applications, receipts for parts used, pass an inspection, and the work must be done by a licensed rebuilder.

Since there can be many rules involved, you will want to check your state’s requirements to ensure your title can change from salvage to rebuilt. You would not want to complete repairs only to find out you missed something at the beginning of the process.

Overall, buying a salvage vehicle can be a good deal. However, it takes some research skills and some extra steps to make sure you know exactly what you’re getting for your money and that it will be adequate 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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