Insuring a Salvage Title Vehicle

Two car collision with damage to both cars

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Salvage title vehicles come with lots of baggage, even once they’re repaired. In addition to the maintenance costs you’ll incur, you also have to worry about keeping your vehicle street legal — and that means finding an insurer.

 Many people look to buying vehicles with a salvage title in hopes of saving lots of cash. A lot of things are to be considered when involving yourself with a vehicle with a salvage title. Understanding used car salvage titles will give you an advantage over the average consumer. Once you decide to go through with purchasing a vehicle with a salvage title, you will need to know what it takes to insure a vehicle with a salvage title.

Key Takeaways

  • A salvage title vehicle is one that was repaired after being deemed a total loss by an insurance company.
  • Insurers are often hesitant to cover salvage title vehicles due to safety concerns.
  • Many insurers will only offer liability coverage, though some will offer physical damage coverage for a high premium.
  • In order to insure a salvage title vehicle, you will likely need proof of detailed inspection along with other verification by the insurance company.

What Are Salvage Title Vehicles?

The term salvage title is applied to vehicles with different stipulations according to the state in which you are located. The all-encompassing stipulation is that the damage to the vehicle is excessive—so excessive repairing the vehicle is pointless to the average consumer or insurance company. So who does fix these excessively damaged vehicles?

Purchasing a salvage title vehicle requires a savvy buyer and a fair amount of tolerance for risk. Even some of the best auto body experts cannot see all the structural integrity of a vehicle. Make sure to verify what the damage was to the vehicle. Run a Carfax report to get the details of every accident involving the vehicle in question.

Insuring a Salvage Title Vehicle

If you plan on driving a vehicle with a salvage title, you need insurance coverage on it. Anytime a vehicle is driven on the road, not towed, insurance is required in order to be driving legally. So if you recently purchased a salvage title vehicle and you want to drive it, you need to insure it.

Requirements for Insuring a Salvage Title Vehicle

Insurance companies do not like salvage title vehicles. Safety is important for both you and the insurance company. Possible structural damage makes insurance companies hesitant in wanting to insure salvage title vehicles. However, it is possible to find an insurer.

Of course, since a salvage title vehicle is riskier than a regular one, you can expect that your insurance premiums will be eyebrow-raising, even if you’re otherwise a perfect candidate for a low rate (you’re a safe driver, etc).

As far as requirements for your vehicle go, a roadworthy operational condition is also essential. Be prepared to provide proof of inspection.

Personal liability and property damage (PLPD) should be fairly easy to get on a salvage title vehicle. Most states require a vehicle inspection verifying the safety of every vehicle on the road anyway. More often than not, insurance companies are mostly concerned with physical damage coverage.

Physical damage can be anything from a ding or dent to deeper scratches. Or, the damage can be much more extreme like a smashed rear quarter panel. Insuring a vehicle with current physical damage can be tricky. Preferred insurance companies will probably not want to insure it. Some non-standard carriers might extensively document the damage so it is not covered by future claims.

Increasing Coverage on a Salvage Title Vehicle

If you have fully restored or have purchased a fully restored vehicle with a salvage title, more than likely you will want to have it protected with physical damage coverage on your insurance policy. Adding physical damage coverage such as comprehensive and collision is when you will probably encounter the most difficulty insuring a salvage title vehicle. Some companies may not offer physical damage coverage of any kind to a vehicle with a salvage title. Insurance companies are very strict about not covering previous damage. You can usually increase the coverage on your salvage title vehicle once you meet the requirements below.

Typical Physical Damage Insurance Requirements

Many companies will allow physical damage coverage if you meet these requirements. Remember to take the value into consideration before causing physical damage to any vehicle. It may not be worth the cost of insurance if the overall value of the vehicle is low.

  • Detailed mechanical inspection
  • Onsight physical damage inspection by an insurance agent
  • Current photos showing multiple views of the vehicle

It is possible to come out ahead with a salvage title vehicle purchase. You should be able to find an insurance company to provide physical damage protection. Know what you are up against and always proceed with caution when it comes to insuring a vehicle with a salvage title.