Does a Salvage Title Affect Insurance?

A salvage title vehicle is usually cheap to buy. That is one of the reasons why people are attracted to them. However, motorists should be aware of a few facts about buying such automobiles and getting salvage car insurance. Some of rebuilt automobiles may have had only cosmetic damages with little or no damage to engines. On the other hand, some repair shops buy these automobiles and let the trainee mechanics work on them before selling it off. It is a luck of the draw buying a car that has once been totaled.

What Is a Salvage Title?

A car is a total loss when an insurer decides to pay its open market value instead of getting it repaired following an accident. After DMV is notified that the vehicle has been totaled, DMV issues a “salvage title” that warns any potential buyers of its totaled insurance history.

Such vehicles can be repaired and a new title may be issued for it with a designation that says “rebuilt salvage” auto. Roughly, 2.5 million vehicles are totaled every year and 1.5 million of them return to the roads after being rebuilt, according to Consumer Federation of America.

Insuring Salvage Title Cars: Is It Hard to Get Insurance on a Rebuilt Title?

General advise would be that you stay away from these automobiles, unless you know what you are doing. Many auto insurance companies aren’t keen on insuring rebuilt cars after an accident. But you may know enough about cars to avoid the pitfalls and get yourself a real bargain. So, can you get insurance on a salvaged car? That would be your next hurdle to pass even if you managed to find a reliable auto on the cheap. It is not easy to find insurance for an automobile that has been fixed and re-registered after being totalled because there are several problems with them. Here are some of those concerns about the vehicles and issues with salvaged auto insurance.

   – Problems with Repairs: The problem is that it is hard to know what was the real damage and trust the repairs. If they are not fixed properly they increase the chance of an accident or serious injuries to drivers and passengers. The California Highway Alliance reckons that about 5% of cars with rebuilt title have dummy or suspect airbags that won’t work in an accident. It is a serious worry to think that mechanics do just enough repairs to pass the inspection to get the rebuilt title. That is what worries insurers too.

   – Previously Damaged Parts: Insurers are concerned that they may have to pay more than usual for repairs if these vehicles are involved in another crash. Previously damaged parts will give in quite easily unless all those parts have been changed with equally durable ones. Then there is the risk of insurance fraud involving these vehicles. They may be deliberately insured and crashed with the full knowledge that they were no good in the first place.

   – Difficulty in Valuations: It is difficult to value them for comprehensive and collision coverage. Even the Kelley Blue Book don’t provide valuation for them. Usually, they are valued at about 50% of similar cars with clean titles.

   – Insurance for Salvaged Title Autos: Probably, you should keep in mind that your first task will be to find a policy. So, keep this in mind that you may need to pay a bit more than usual for insurance.

If you are only looking to buy liabilities only cover, you probably will be able to find a few companies who have no problem insuring an auto that was once written off. Some companies will not be interested in any case. Others will not offer comprehensive and collision coverage.

You may have to accept that you will not have many insurers rushing to offer quotes. Your options will be limited to several providers when it comes to salvage vehicle insurance. This doesn’t mean that you cannot find a cheap policy from a reputable insurer but you need to shop harder.

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