Can I insure a car with a salvage or rebuilt title?

If natural disaster, vandalism, theft or an accident has caused your auto insurance company to declare your vehicle a total loss, it doesn’t necessarily mean it’s the end of the road for your car.

In many instances, vehicles that have been written off by insurance companies are retired from use, never to hit the road again. But this isn’t true in all cases. In certain situations, a salvaged car can be rebuilt so it can return to duty as a source of daily transportation.

If a car has suffered serious damage, it may be given a salvage title by your state’s transportation agency. A vehicle that’s been rebuilt after this kind of damage may be issued a rebuilt title, depending on your state. In this article, we’ll explain more about each title and provide insight into how these titles can affect the cost and availability of your car insurance. We’ll also take a look at which insurance companies provide coverage for vehicles with rebuilt titles.

• What are salvage and rebuilt titles?
• Can you get insurance on a car with a salvage title?
• Which insurance companies cover rebuilt titles?

What are salvage and rebuilt titles?

Let’s say your car has been in a major accident or suffered serious damage due to theft, vandalism or natural disaster.

If the cost of the damage is close to or in excess of the fair market value of your car, the insurance company may declare the car a total loss. Your state’s transportation agency may give the vehicle a salvage title — though laws regarding when a salvage title is required may vary by state. In many states, salvage title vehicles can’t be driven on public roads.

If significant repairs have been done on a salvage car, it may be issued what some states call a rebuilt title. A rebuilt title indicates that a salvage title car has gotten the repairs necessary to make it safe for driving. To qualify for a rebuilt title, a salvage vehicle may need to pass state-mandated safety and anti-theft inspections. Required inspections may vary from state to state.

Can you get insurance on a car with a salvage title?

You can legally buy or sell a vehicle with a salvage title. But because it’s generally illegal to drive one of these cars on the road — unless it’s to or from a vehicle inspection site — it’s not possible to obtain car insurance on a salvage vehicle.

The situation changes if your car has a rebuilt title. It’s legal to drive a car with a rebuilt title, and some insurance companies offer coverage for these vehicles.

But not all providers offer coverage for vehicles that once had a salvage title. Among those that do, coverage options may be limited, and full coverage may not be possible.

“Companies that write car insurance policies for a vehicle with a rebuilt title tend to offer liability insurance only,” says Penny Gusner, senior consumer analyst for CarInsurance.com. “It’s harder to find an insurance provider that will offer the owner the option of adding on comprehensive and collision coverage.”

What do insurance companies require when covering a rebuilt vehicle?

If you hope to get your salvage title vehicle back on the road, it will need to pass certain state-mandated inspections designed to determine whether it’s safe to drive the vehicle on the road. To qualify for auto insurance coverage, the car usually has to pass an inspection from a mechanic.

“Typically, the insurance company will want a statement from a mechanic that the car is roadworthy,” says Gusner. “This is especially true if you’re looking for physical damage coverages of comprehensive and collision.”

As is the case when buying standard car insurance, you’ll need to present your driver’s license and proof of vehicle registration when buying coverage for a vehicle with a rebuilt title. You may also need to provide the vehicle identification number, or VIN, a copy of the vehicle’s rebuilt title, or photos of your car.

Is insuring a car with a rebuilt title more expensive?

If you’re insuring a rebuilt title car, you’ll likely pay a steeper insurance premium than you would for the same coverage on a vehicle that hasn’t been salvaged and rebuilt.

“That is partially because there are not as many companies offering this coverage,” says Gusner. “With less competition, rates can be higher.”

It’s also worth noting that if your rebuilt title car is totaled, you may not get much from your insurance company on your comprehensive or collision claim — payouts are usually based on the value of the vehicle, which may be lower due to the rebuilt title.

Which insurance companies cover rebuilt titles?

General Insurance insures cars with rebuilt titles. Insurers like The Hartford, 21st Century, Infinity and Omni, for example, may also cover these vehicles, according to Carinsurance.com.

Keep in mind that some of these carriers may offer coverage for cars with rebuilt titles in some states, but not others. To know for certain whether these car insurance companies offer coverage for rebuilt titles in your state, you’ll need to contact the company or an insurance agent.

What’s next?

If you’re considering buying a rebuilt title vehicle, be sure to check with your state’s transportation agency to understand state laws. You may also want to get a vehicle history report, such as a Carfax report, and have the car inspected yourself to make sure it was properly repaired and is safe to drive. Check with your auto insurance company to see if it insures rebuilt cars — or if you’ll need to find an insurance policy elsewhere.

As when buying car insurance for a vehicle with a clean title, it’s important to shop around and compare insurance quotes. Doing so may provide you with reasonably affordable options, especially if you’re seeking just liability coverage for the vehicle.