Can you insure a salvage title car?

Salvage title cars are damaged vehicles that were declared a total loss by the previous owner’s insurance company. You can buy a rebuilt salvage title car, but you'll still have a hard time finding car insurance for a vehicle that’s been totaled.

To get insurance for a vehicle with a salvage title, the car must be restored so that it can be driven safely again. It still might be hard finding rebuilt title insurance after a vehicle has been restored. Some companies offer liability coverage for rebuilt salvage cars, but not comprehensive and collision.

What is a salvage title car?

A salvage title car is a vehicle that was declared a total loss by an insurance company and is being resold. When your car’s value plummets after it’s heavily damaged and no longer safe (or able) to drive, it receives a salvage title.

A car is totaled when the cost to repair the vehicle is greater than a percentage of the car’s value after depreciation — also called a vehicle’s actual cash value. 

Companies can decide a car is a total loss after any amount of damage, but states have different total-loss thresholds that determine when a damaged vehicle must get a salvage title instead of a clean title.

Cars with salvage titles might have been damaged in an accident, but they might also have been totaled by weather, a flood, or something else. No matter how they were damaged, salvage title cars can’t be registered and driven on public roads.

What’s the difference between a salvage and rebuilt title car?

The main difference between a car with a salvage title and one with a rebuilt title is that a salvage title car is undrivable. Due to the car’s damage, you won’t be able to drive (or insure) a car with a salvage title until it’s rebuilt.

You can tell what type of title a car has by looking at its “color.” Cars have different colored titles depending on their damage history, like:

• Clean title (has not been totaled): Green

• Salvage title: Blue

• Rebuilt title: Orange

Can you insure a salvage title?

You can’t get insurance for a car with a salvage title until it’s been restored and passed an inspection.

After a salvage title car passes inspection, it receives a rebuilt title and can be registered for use on the roads. But it’s still hard to find car insurance — especially full coverage protection — for vehicles that used to have a salvage title.

Insurance companies are often reluctant to cover rebuilt salvage cars since they had severe enough damage to be declared totaled, even if they’ve been significantly repaired. 

You won’t be able to get full-coverage insurance for a salvage title after it’s rebuilt, but you can get liability coverage — and, like with any car, you’ll be required to have enough coverage to drive legally in your state.

How do you get insurance on a salvage title?

Insuring a salvage title car can be a long process — and it’s certainly more complicated than insuring a non-totaled car. To get car insurance for a salvage title car, you’ll need to:

1. Restore the salvaged car’s damage

2. Have it inspected by your state’s DMV or equivalent agency

3. Get a rebuilt title instead of a salvage title

4. Find an insurance company that will insure a rebuilt salvage car

5. Send verification that your vehicle is safe to drive (and to insure)

Once your car has been restored, you’ll have to sign up for an inspection through your state’s Department of Motor Vehicles. 

This usually means you’ll need to pay a fee, which could be as low as $8 (in Texas) or as high as $200 (in New York). These inspections ensure that you didn’t rebuild your car with stolen parts. You may also need your car to undergo a safety inspection to confirm that it’s safe to drive.

Once you’ve cleared the salvage title, you’ll need to find a company that’s willing to offer rebuilt title insurance. To get insured, you may need to send pictures or have a professional mechanic verify to the insurance company that the vehicle is safe to drive.

How much does rebuilt title insurance cost?

The cost of insurance for a car with a rebuilt title varies depending on the insurance company, the extent of the car’s pre-repair damage, and the amount of coverage that you buy — among other factors.

Insuring a rebuilt title car can cost more than it does to get insurance for a car of the same model that wasn’t totaled, though it’s up to the insurance company’s discretion. It may cost more to insure rebuilt titles because companies may be wary about unseen sources of damage that weren’t fully repaired.

What are the risks of rebuilt salvage title cars?

It can be risky to purchase a vehicle that used to have a salvage title, because that means the car has a history of severe damage. Even after being repaired, some types of lingering damage may affect the car’s safety and drivability.

That’s why insurance companies view rebuilt titled cars as more of a risk. It’s also why you should have a trusted mechanic look over a rebuilt title car before you complete any purchases.