How to insure a rebuilt title car

Insuring a salvaged car can be tricky.

Anna Swartz 1600

Anna Swartz

Published May 9, 2019

A rebuilt title car, or a car that has been declared a total loss but was restored to drivable condition, can be a risky buy for drivers. Rebuilt title cars are much cheaper than clean title cars, but when you buy one, you may not get a chance to learn the history of what led to its severe damage.

If the damage that totaled the car was just cosmetic, or was repairable, then a rebuilt title can be made safe to drive again — but some types of damage, like flood damage, can leave lasting issues that make the vehicle less safe to drive, even though they may not be immediately apparent. For that reason, buying car insurance for a rebuilt title is hard.

Some car insurance companies flat-out refuse to write policies for rebuilt titles, and others will only offer limited coverage. Still, finding car insurance for a rebuilt title isn’t impossible. Here’s what you need to know about getting insured if you’re considering purchasing a rebuilt title car.

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What is a rebuilt title car?

A rebuilt title car describes a vehicle that was so damaged that it was declared a total loss. Car insurance providers usually determine a car to be a total loss when the cost to fix it exceeds a certain percentage of its value. Some states have mandated total loss thresholds, and set those percentages.

In New Hampshire, for example, the state sets a total loss threshold of 75%, meaning that if the costs to repair a damaged car equal 75% or more of its value from right before it was damaged, it’s a total loss.

Once a car is determined to be a total loss, it’s given a salvage title. A car’s title certificate is a legal document, issued by a state department of motor vehicles, that says who owns a vehicle. Typically, when a car is a total loss, its handed over to the previous owner’s insurance company, and its salvage title marks it as a car that’s been seriously damaged.

If the car is then purchased and repaired, it must be inspected by the DMV before it can be legally driven again. If the inspector approves it as drivable again, the salvage title becomes a rebuilt title. Those changes on the car’s title are permanent — a rebuilt car can never have a clean title again, even if it’s restored to perfect working order.

If you’re considering buying a rebuilt title car, you can expect to pay much less than you would for one with a clean title. But it’s very important to have a professional mechanic inspect a rebuilt title car before you decide to drive it — not all kinds of damage are immediately apparent, and you don’t want to buy a car that turns out to be unsafe.

Read more about buying a salvage title car.

Is a rebuilt title bad for insurance?

In short, yes. A rebuilt title sends up a red flag to insurers that your car is riskier to insure, and may be more likely to have problems that could lead to a claim. As we mentioned earlier, many insurance companies simply do not insure rebuilt title cars. But car insurance is required in almost every state, and it’s important to have coverage even in the states where it’s not legally mandated.

So if you plan to drive a rebuilt title car, you should look into which car insurance companies will write policies for rebuilt titles. If you already have car insurance for your other vehicles and you’re thinking of buying a rebuilt title car, get in touch with your insurer and ask them they’ll insure your rebuilt title car. Some major car insurance companies that may write policies for rebuilt title cars are Geico, Progressive and Allstate — but the coverage rules vary state to state.

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Can I get full coverage insurance on a rebuilt title car?

Many insurers that write policies for rebuilt title cars will only write limited policies. This may only include liability coverage — which is required in most states, and covers the costs incurred when you cause damage or injury with your vehicle. “Full coverage” usually refers to a policy that includes liability as well as collision and comprehensive coverage, and it will be hard to find an insurer that will offer comp and collision for a rebuilt title car.

It’s always important to shop around and compare quotes when buying car insurance, but the limited options when it comes to insuring a rebuilt title car make it all the more important to solicit as many quotes as possible.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.