Can You Insure a Car With a Salvage Title?

A checklist for insurance damage repair

One of the many reasons why people buy salvage title cars is because of their fairly low costs and the possible high value of the spare parts. Considering the extremely high cost of living these days, it makes sense as to why one would be tempted to save a couple of bucks by purchasing a salvage title car.

However, as inexpensive as these cars might be compared to brand new vehicles, they do come with a lot of baggage of their own. Apart from the high maintenance costs that you are likely to incur, you are also required to find a way to make the car legal so that you can drive it on the road with the necessary authorization. In other words, this means finding an insurer or an insurance company that will insure your salvage title car for you.

The question that arises here, though, is, can you insure a car with a salvage title?

Insurance for Salvage Title Cars

In simple words, yes, insuring cars with a salvage title is possible, but you shouldn’t expect or look forward to a full-fledged deal. Most insurance companies will only go as far as offering you collision coverage on your salvage title car. What this means is that in case of a collision, the company will only cover 80 percent of the cost or damages, that too, according to the market value of the car. The remaining 20 percent of the cost will have to be covered by you.

However, this type of insurance highly depends on the physical state of your car, the state you live in, and the policies of the insurance company.

It is also essential to note that there some companies don’t offer insurance for salvage title cars at all. They don’t write policies for salvage cars mainly because they don’t know the extent of the damage done to the car and whether it’s actually roadworthy. There’s also the possibility that the car has just been made presentable by unscrupulous car dealers.

In such cases, it is best to buy salvage title cars from an insurance company alone because they’ll have all the details of the car, the damage that the vehicle comes with, and reasons why it was declared a total loss. That way, they are likely to end up writing a proper policy and will issue you with maximum coverage on the car.

Documentation and Other Requirements for Insuring Salvage Title Cars

Companies that do offer provide some kind of insurance on salvage title cars, which is mainly liability coverage, will require you to provide some important documents and fulfill other important requirements. Liability coverage is a type of insurance policy that only covers for you if you end up damaging someone’s property or injuring them in an accident.

In order to obtain insurance for salvage title cars, you are required to submit the following essential information:

A copy of your vehicle’s title
Registration of the vehicle
VIN (Vehicle Identification Number) of the vehicle

Additionally, some insurance companies might have further requirements, such as:

A mechanic’s report
Inspection of the vehicle
A vehicle appraisal

Cost of Insuring Salvage Title Cars

The thing with salvage title cars is that while you may have to pay very less initially when purchasing the car, you are likely to end up paying a lot more in order to get it insured.

The exact cost of insuring a car with a salvage title entirely depends on the automobile insurance carrier that you choose, as well as the pre-set policies previously written according to the model and make of the vehicle.

Many insurance companies tend to add an extra charge when it comes to insuring salvage title cars. So, even if your car is more roadworthy compared to other similar cars, you will probably have to pay a significant amount of money.

Another factor to consider here is that insurance policies are usually drafted according to the year, model, and make of the respective vehicle. According to that principle, you will end up paying the same amount for insurance as any other person with exactly the same car, but one which is not damaged.

A major disadvantage of getting insurance for salvage title cars from a financial perspective is that since these vehicles start out at fairly low costs, you are likely to receive very less in the way of insurance from the company if your car ever suffers extreme damage. The main reason for this is that the insurance percentage or amount for these vehicles is based on their initial value. Since you paid less during the time of purchase, you will also receive less at the time of insurance.

How to Increase Coverage on Salvage Title Cars

The idea of purchasing a salvage title car might not sound as cost-effective anymore; however, if you really wish to buy one, there’s a way through which you can increase coverage on such vehicles.

This depends on two main instances:

If you have fully restored the vehicle after buying it.
If you have purchased a fully restored vehicle.

In both the above-mentioned cases, you can protect the vehicle by requesting the insurance company to add physical damage coverage to the final insurance policy.

This refers to the comprehensive and collision coverage types that we mentioned earlier. Getting these approved is probably the most difficult part of insuring a salvage title car because most companies are very strict about it. However, if you successfully meet a few requirements for physical damage coverage, you can increase the coverage on your car.

The requirements include:

A thorough and detailed mechanical inspection of the vehicle
Current photos of the vehicle from different angles
Physical damage examination carried out by an insurance agent on-sight

However, there’s also a downside in this case. If the overall value of your salvage title car is fairly low, going through all this hassle is not exactly worth the total cost of the insurance.

Helpful Tips for Buying Salvage Title Cars

If you wish to buy a salvage title car and get it insured, there are a few things that you must bear in mind before making the final purchase.

Get a trusted mechanic to thoroughly inspect the vehicle before you buy it. This is to make sure that the car is roadworthy and that the seller isn’t deceiving you in any way.
Always check the identification number of the car before purchasing and also run a deep check on both the car and the seller.
Fully understand the insurance policy, along with the rates, with the help of the insurance provider before buying the policy.
Be well-informed on the existing laws of the state you live in, especially those pertaining to the buying and selling of salvage title cars.

Concluding Note

Getting insurance on salvage title cars is surely possible, but is it worth all the time, money, and effort?

Even if you do end up buying one, make sure to ask your insurance provider for any possible add-ons that you can get to cover the costs of your car. Proper research on your part is of utmost importance here in order to make a well-informed decision.

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