Can you insure a salvage title car?

If you’re looking to buy a car with a salvage title, it’s important to ask yourself “can I get full coverage on a salvage title?” Salvage car insurance is typically more expensive than coverage for a comparable clear-title car.

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UPDATED: Jun 2, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 2, 2022Fact Checked

Here's What You Need to Know

  • Is insurance higher on salvage title cars? It usually is.
  • A car may be totaled for several reasons.
  • You may only be able to get liability auto insurance coverage for a salvage titled car
  • If you’re considering full coverage of salvage car insurance, keep in mind the insurance company will only reimburse you 80 percent of its salvage value.

The above are just some of the many factors that can either raise or lower premiums for salvage vehicle insurance coverage.

If you want to buy the best car possible and still maintain a low cost of ownership, you must do your homework before you sign contracts or negotiate.

When you find the car that you have always wanted to own and you see it listed below market value, it feels like it is meant to be. Is insurance higher on salvage title cars? Let’s find out.

Start comparing car insurance rates now with the FREE tool above and get car insurance coverage for your salvage car.

Is insurance higher on salvage title cars?

Can you insure a car with a salvage title? Well, it depends. It’ll probably be easy to find liability coverage, but not all insurers offer comprehensive and collision for salvage-titled cars. 

Like all cars, salvage vehicles will need at least the minimum requirements for coverage in your state. Check out your state’s requirements in the table below.

Minimum Liability Auto Insurance Requirements by State
ALBI & PD Liab25/50/25
AKBI & PD Liab50/100/25
AZBI & PD Liab15/30/10
ARBI & PD Liab, PIP25/50/25
CABI & PD Liab15/30/5
COBI & PD Liab25/50/15
CTBI & PD Liab, UM, UIM25/50/20
DEBI & PD Liab, PIP25/50/10
DCBI & PD Liab, UM25/50/10
FLPD Liab, PIP10/20/10
GABI & PD Liab25/50/25
HIBI & PD Liab, PIP20/40/10
IDBI & PD Liab25/50/15
ILBI & PD Liab, UM, UIM25/50/20
INBI & PD Liab25/50/25
IABI & PD Liab20/40/15
KSBI & PD Liab, PIP25/50/25
KYBI & PD Liab, PIP, UM, UIM25/50/25
LABI & PD Liab15/30/25
MEBI & PD Liab, UM, UIM, Medpay50/100/25
MDBI & PD Liab, PIP, UM, UIM30/60/15
MABI & PD Liab, PIP20/40/5
MIBI & PD Liab, PIP20/40/10
MNBI & PD Liab, PIP, UM, UIM30/60/10
MSBI & PD Liab25/50/25
MOBI & PD Liab, UM25/50/25
MTBI & PD Liab25/50/20
NEBI & PD Liab, UM, UIM25/50/25
NVBI & PD Liab25/50/20
NHFR only25/50/25
NJBI & PD Liab, PIP, UM, UIM15/30/5
NMBI & PD Liab25/50/10
NYBI & PD Liab, PIP, UM, UIM25/50/10
NCBI & PD Liab, UM, UIM30/60/25
NDBI & PD Liab, PIP, UM, UIM25/50/25
OHBI & PD Liab25/50/25
OKBI & PD Liab25/50/25
ORBI & PD Liab, PIP, UM, UIM25/50/20
PABI & PD Liab, PIP15/30/5
RIBI & PD Liab25/50/25
SCBI & PD Liab, UM, UIM25/50/25
SDBI & PD Liab, UM, UIM25/50/25
TNBI & PD Liab25/50/15
TXBI & PD Liab, PIP30/60/25
UTBI & PD Liab, PIP25/65/15
VTBI & PD Liab, UM, UIM25/50/10
VABI & PD Liab, UM, UIM25/50/20
WABI & PD Liab25/50/10
WVBI & PD Liab, UM, UIM25/50/25
WIBI & PD Liab, UM, Medpay25/50/10
WYBI & PD Liab25/50/20
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Are salvage title cars more expensive to insure? The cost of insurance for vehicles can go up for several reasons. In most cases, factors that increase premiums make the policyholder a higher risk. Learn how insurance companies determine a salvage vehicle’s value first.

Driving a salvage vehicle can make you a high-risk client, and this is why the premiums might be higher than they would be if the car had not been salvaged.

Even if the car has passed safety inspections and been issued as safe to drive, there could be defects that are hard to spot and that could lead to serious accidents. This is what concerns insurers the most.

Another reason why salvage cars are a sore spot for insurance companies is that they are so hard to value.

When you want to carry comprehensive or collision on your car, you can expect to pay more for that coverage simply because the company cannot easily value the car. In exchange for the difficulty, you will have to pay higher premiums.

If you do just want to carry liability and other forms of protection like medical payments or uninsured motorist, you may not see a change in the premiums because the value is not applicable.

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How can you get insurance on a salvage title?

Salvage titles are sometimes difficult to find insurance coverage for

  • Your current insurance company may not cover a salvage title, so be sure to check with them before you make any decisions
  • If you are looking for insurance coverage, you may only find liability for your salvage car
  • In some cases, your car may be considered a restored classic rather than a salvage title

While you can obtain car insurance for a salvage car title, you need to know the risks and understand who is willing to cover them.

A salvage car is a car that has been deemed by an insurance professional to be so damaged from an accident or vandalism that the market value is 30 percent or less of the blue book value of the same vehicle in prime condition.

You can find your particular salvage title insurance value by contacting your car insurance company.

Most people, when an accident occurs, will allow the towing company to take their vehicle to a local mechanic, or in some cases an appraisal center, for the insurance company to appraise the damage.

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If the vehicle is considered totaled — which makes it a salvage vehicle — the majority of people take their belongings and allow the company that is storing the vehicle do with it what they will.

Others choose to take the vehicle with them in hopes of repairing it themselves.

What do those companies do with salvage cars left to them? The answer to that depends on how bad the damage is.

If the body is in terrible shape but the engine is fine, they may sell the motor right out of the vehicle. They may also take the whole thing apart and sell it for parts.

There are also those instances that allow for some repair, even if the insurance company deems it a lost cause, and these companies may choose to fix the whole thing and sell it to a new customer.

Finally, they may sell the whole thing as is, allowing their customer to take responsibility for the vehicle and its repairs.

Can you insure a salvage vehicle?

Have you ever wondered whether insurance companies would be willing to cover your salvage car?

You may not be able to get covered for a salvaged vehicle from your current car insurance company.

Many insurance companies will not insure salvage title cars; if your insurance company is one that doesn’t provide this insurance, then you will want to shop around for other alternatives.

One of the things to be aware of is that most auto insurance companies that do offer salvage title insurance will not offer much in the way of coverage.

If you are looking to insure a salvage title vehicle, there are a couple of things you should consider.

First of all, most will not provide more than liability coverage for the vehicle.

If you were hoping for a comprehensive plan, depending on what state you live in, you would probably be out of luck.

If you are concerned about theft, you may want to invest in a storage space for your salvage title vehicle.

Also, if your intention is to repair and fix up your salvage car, you need to understand, with some exceptions, that the value will always be considered at that 30 percent (or less) it was figured at when the vehicle was in the accident.

As you probably surmised, for every rule there is an exception.

Most insurance companies will make an exception for any classic car (or truck) that has been appraised by a professional and announced in a specific condition.

Once an expert verifies a vehicle, the insurance company will also send an agent (or appraiser) to look at the vehicle as well. You will be required to get special plates for the car declaring it a restored classic.

Find out if you will be able to get salvaged title insurance by contacting your car insurance company. They will know the best process for obtaining the title.

There are some insurance companies who will also consider a non-classic restored vehicle for additional appraisal.

However, regardless of the new appraisal, because the vehicle has been in an auto accident, it will never have the value of a vehicle of the same type that has never been in an accident.

Fortunately, the cost of insurance for a salvage title vehicle will be about the same price as it would for a regular vehicle.

However, just like any other type of car insurance, it is important that you shop around to get the best deal.

If you are driving a salvaged car, you should compare quotes to find the best rates.

With a free car insurance rate quote tool, you can compare the rates of several companies all in a single session.

You simply answer a few questions about your driving history, age, where you live, and a few other things, and we will get you instant quotes from several reputable car insurance companies.

Enter your zip code below to compare rates from multiple insurance companies today.

What does it mean when a car has a salvage title?

Once you discover that your dream car that is listed for sale for a low price has a salvage title, alarms may start to go off in your mind. Can you drive a car with a salvage title? You must have it properly insured before driving just like any car.

This video goes over some things on salvage titles.

A salvage title is not always a deal-breaker, but you need to know what it means and how it can affect your insurance before you start to bid the price down with the seller.

What is salvage insurance? Read this guide to insuring salvage vehicles, and decide if the deal is worth it in your mind.

Several different factors dictate how much a person’s car insurance will cost:

  • Location
  • Vehicle type
  • Driving record

A vehicle either has a standard title or a salvage title. When you buy a car that holds a salvage title, the seller of the car is legally obligated to disclose this before you sign the bill of sale or you can file a lawsuit.

One of the reasons why sellers are required to disclose that a car is “salvage” is because this classification means that the car once had damages that exceeded 75 percent of its value.

It may be a red flag, but for wise buyers who do their due diligence buying a salvage-title car could be a great way to get a terrific deal. When you are buying a car on a very low budget, you can get a car with great options that would otherwise be out of your price range.

The key is to know what you are buying, what type of damage was sustained, and when the vehicle passed the safety inspection after repairs.

Here are some of the types of damage that can lead to a salvage title:

  • Flood or Hail Damage — Many states require that cars with flood or hail damage be salvaged because they can sustain rust damage even when a restoration company is hired.
  • Recovery of a Stolen Car — When a vehicle is stolen, the insurance company will wait for a reasonable amount of time to see if the car is recovered. If it is never recovered and a claims payment is made, the insurance company keeps the car and can sell it to a salvager.
  • Severely Damaged in an Accident — If a car is in a major accident and the repairs are costly, the car may be salvage. This happens when the resale value of the car is low and there is a major defect following the accident.

If repairs are made, be sure the shop that does the repair work is done by a reputable mechanic.

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Can you insure a salvage title car with any insurance company?

What car insurance company covers salvage titled cars? Many companies offer salvage title insurance like Geico and Progressive, but you’ll always need to check with your insurer.

Some companies are very strict with their underwriting guidelines and will not insure any vehicle that has a salvage title. You should research insurers before you decide that buying that salvage car is best.

One of the major reasons why some experts insist that you should avoid buying a salvage car is because they can be so hard to insure.

Many insurers will write liability insurance for vehicles that have passed safety inspections, but they will be reluctant to write a policy with physical damage coverage.

If you can find a good deal and you have verified that there are no major limitations for filing a claim because of the salvage branding, you can proceed and make an offer.

Can you put full coverage on a rebuilt title?

As you have heard, it can be more expensive to buy comprehensive and collision insurance on a salvage car when you find a company that offers it. While having full coverage is important to some, you have to wonder whether or not it is worth it.

An insurance company already evaluates the value of a car low, but when the car is salvage you will only get about 80 percent of its salvage value.

Many times, this is lower than the cost of the insurance over just a short period of time.

It can be very difficult to decide to buy a car that you know has sustained a great deal of damage. If you have done the research and you plan to keep the car long-term, you can proceed and make a deal on the car.

Be sure to compare the cost of insurance with several companies through an online rate comparison tool and disclose the title status so that you cover all of your bases before buying.

Start comparing car insurance rates now by entering your zip code below.

When You Need Car Insurance for a Salvage Title Car

Now that you know you can get car insurance for your salvage title, the question then becomes, should you get that insurance?

There is no single answer to this issue, as there are some factors that need to be considered before you can determine the need. Salvage car insurance can be a great thing, but it is up to you the best route to take.

Every state has different laws about the vehicles that you own.

Some states allow you to skip purchasing insurance as long as your vehicle is on blocks, and you provide a letter stating that it isn’t being driven while it is being restored.

Other states require you to turn your license plate in for the vehicle and pay the fees to reinstate it once you are ready to insure your vehicle.

You will need to consider how long you plan on driving a salvage title car and which insurance companies will properly cover you!

There are some states that require any registered vehicle to have the minimum coverage of car insurance.

Most states will work with you, but it is important to know and understand your state’s laws.

It would be a shame to have your vehicle impounded and incur fees on a vehicle that you aren’t even driving.

Also, if the salvage vehicle was yours in the first place and you still owe money on it after the insurance company has paid you for the loss of the vehicle, you need to negotiate with your lender the release from carrying full coverage on the vehicle (which is in your loan contract).

Most banks will release you from that requirement as long as the vehicle isn’t running, but you must ensure that you contact them with the details of why you want to drop full coverage and get their permission.

Of course, if you are driving the salvage title vehicle, then you must obey your state’s laws regarding the purchase of car insurance.

If you make a decision to repair a vehicle that your insurance company has deemed totaled, you need to speak to your agent and determine their policy on repairing totaled vehicles.

Some companies will penalize you for the repair.

It is always important to understand the rules and policies of your insurance company, or you could end up paying a lot more than you bargained for.

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What is salvage car insurance?

Salvage car insurance is insurance for vehicles that were involved in an accident, vandalism, or a flood

  • Some insurance companies will specifically name their coverage salvage car insurance
  • Salvage car insurance is a bit different from other types of car insurance options

When a person has an auto accident that totals their vehicle, in most cases, they allow the towing company to take it away and they file their claim with the insurance company, assuming that they are going to dispose of the vehicle.

What really happens, however, is that the towing company gets to keep the vehicle and all of its contents if the owner doesn’t come and make a claim on it.

If they fix up the car and sell it, or they sell the damaged vehicle to a third party who fixes it up and sells it, this is considered a salvage vehicle.

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Why do I need to know what qualifies as a salvage vehicle?

It is important that you understand what a salvage vehicle is so that you aren’t confused if an insurance company refuses to insure your vehicle because it is a salvage vehicle.

What an insurer pays out for a salvaged vehicle and charges to insure it depends on the damage sustained and the car itself.

It is also important that you know that you are buying a salvage vehicle because the overall value is far less than buying a vehicle of the same type and condition that has never been in an auto accident.

You don’t want to pay market value for a vehicle that doesn’t have any real market value.

Can you get insurance on a salvage title?

In most cases, you will probably be able to find an insurance company that will insure your salvage vehicle, although you may find that your choices are limited depending on the nature of the salvage.

There is no guarantee that you will be able to get insurance, but you should be able to get something.

What surprises many people is the value that the insurance company places on their salvaged vehicle when they purchase coverage.

When an insurance company insures a salvaged vehicle, they only place a dollar value on the vehicle that equals the value after the accident.

There are issues with salvaged cars. If you believe you repaired the damage and you didn’t, and you are in a car accident, your injuries could be much more severe because of the lack of safety of your vehicle.

After you put work into a vehicle and possibly spend a few thousand dollars on it, not having the insurance to pay for that investment can be financially devastating.

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How can I avoid buying salvage car insurance?

The simple answer to this question is to not buy a salvage car. This leads to the next question of how to know if a car is a salvage car.

This leads to the next question of how to know if a car is a salvage car. Fortunately, this is a simple enough question to answer as well. Here are three steps to take when buying a car:

Here are three steps to take when buying a car:

  • If you purchase a brand new car, then it isn’t going to be a salvage vehicle. It is the used cars that you need to worry about. If you are buying from a reputable car dealer, then you probably won’t have to worry about this issue either.
  • However, before you purchase from a car dealer, ask about their policy regarding the selling of vehicles that have been in an auto accident. If they aren’t willing to guarantee that their vehicles are accident-free and put it in writing as well, then you need to walk out the door.
  • You can also purchase your own proof about a vehicle that you are interested in buying. Because every car has a vehicle identification number (VIN) or unique serial numbers to identify the vehicles, you can purchase accident reports on those vehicles.

There are no laws protecting you should you unknowingly purchase a salvage vehicle. That is why it is important to have all of the facts when you are buying a used vehicle.

How expensive is salvage car insurance?

For the most part, salvage car insurance is about the same price as traditional insurance. The real difference is the value placed on your vehicle.

Frequently Asked Questions

We’ve added a few FAQs below.

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How much should I pay for a salvage title car?

After a vehicle is totaled out by the insurer, it can be re-built and re-titled as a salvage car. But the industry will then typically deduct about 20 to 40 percent of the Kelley Blue Book value from what it would be with a clean title

Can you insure a salvage title car in California?

.It may be more difficult, but there are licensed insurers in California that will insure a salvaged vehicle.

How do you get a salvage title cleared?

Can you clear your salvaged car and get a clean title for it? The answer to that is no. But you might be able to fix it and get a rebuilt title which opens up a lot of options for you.

But changing a salvage title to a clean title is considered to be fraud. Totaled cars are sometimes less structurally sound from prior collisions which makes it dangerous to give it a clean title which a new owner may think is OK. If it was involved in a crash and rebuilt, some parts may not be as strong as they once were.

The National Motor Vehicle Title Information System tracks five factors that help reduce “title washing.” These include the current state of the title, history, odometer reading, totaled out loss history, and salvage history. GovInfo reports that these steps help prevent title washing which happens to 57,000 vehicles every year.

If you are looking for ways to save money on your salvage car insurance, then you need to start right here with a free quote tool.

The bottom line is that the best way to save money is by comparing prices.

You can start right now to get salvage car insurance by entering your zip code and getting your online car insurance quotes.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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