Buying Salvage-Title Auto Insurance: What You Need To Know in 2024

A Concise Overview

• Auto insurance for salvage cars may be expensive and hard to find
• A vehicle that has been deemed “totaled” by an insurer, can be rebuilt and re-titled
• Changing a salvage title to a clean title is considered fraud

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Whether restoring the cars or buying it from someone else at discount, people are driving salvage cars. A salvage vehicle by definition presents a higher risk, especially if the restorer is not experienced and highly knowledgeable. Buyers could end up with a high cost of repair or a car that isn’t drivable. Compared to the average cost of a similar car without a salvages title, though, they can also be a financial steal.

Once you’ve decided on a car, the next step for a vehicle owner is insurance. Can you get insurance on a salvage title? Absolutely. No matter what you’re driving, you need insurance that meets state minimums. Drivers have options when choosing an insurance company and policy. Just know that there will be limits.

The first rule of the game is simple. A salvage title vehicle has to have a rebuilt title. You have to prove it’s safe to be on the road. Otherwise, it cannot be registered, driven on public roads, or insured. Once you meet this standard, know most insurers won’t offer collision or other coverage for your car. You can buy the state-required liability protections. Insurance companies are typically wary of salvage cars in that they don’t know if damages are from the current accident or an accident that totaled the car the first time. If you do find full coverage for a salvage vehicle, be prepared to pay a higher premium.

Does Geico insure salvage title cars, or what about how to buy auto insurance from Progressive for a salvage title? We can help. Enter your ZIP code above to get free quotes from multiple insurers for your salvage car.

Can you insure a car with a salvage title?

You certainly can, but fair warning, car insurance for a salvage title vehicle is going to be more expensive. Whether or not it’s officially rebuilt, a salvage car is a minefield in an insurer’s eyes. Basic questions about the safety and reliability of a car as well as repairs after even a minor incident are key concerns.

When it comes to a salvage title, car insurance companies can be hesitant, especially for comprehensive coverage. The best way to find competitive rates and coverage is by getting multiple quotes and comparing them side by side.

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What are the minimum coverage requirements for salvage cars?

No matter what else, you have to carry the state minimum requirements for liability car insurance to legally drive. The table below shows these requirements for each state.

Minimum Liability Auto Insurance Requirements by State

If you’re a little confused by all these numbers, don’t worry. Many drivers want an expert to guide them, and it starts before you sign up for insurance. If you’ve never owned a salvage car before or have moved to a new state, always let an expert in salvage title laws guide you through the process.

All salvage cars should be rebuilt and pass a safety inspection before being registered with a salvage title. Filling out your title application correctly is key. Then you can move on to insurance.

If you look at the numbers above, the first two letters are the state. So the state of California requires both bodily injury and property damage liability coverage of 15/30/5. In other words, you must have:

• $15,000 for any one person injured in one accident
• $30,000 in coverage for all people injured in one accident
• $5,000 for property damage

If you’re getting insurance for a restored title in AZ, the requirements are the same except for the property damage coverage. Arizona state requires $10,000. 

How does extensive damage affect a car’s value?

This table covers the differences between salvage, clean, and rebuilt titles.

Types of Vehicle Titles and Their Details

Once a vehicle has been totaled out by an insurer, it can be rebuilt and re-titled with the proper salvage inspection and repairs. But the industry typically estimates that salvage vehicles lose 20 to 40 percent of their Kelley Blue Book value over a clean title.

What does that mean for your auto insurance? Can you get full coverage insurance on a salvage title? More great questions to be asking.

If you do find an insurer who is willing to sell full coverage car insurance for your salvage car and you get into an accident, the insurance payout on a salvage title car may be only 60 to 80 percent of the market value of the vehicle. The insurer may also be unwilling to pay for more extensive repairs as they may be from the original accident. For this and other reasons, salvage title car insurance claim settlement can be more complex.

Though you might save on the salvage car on the front end, you might end up paying for it in the end.

How do you clear a salvage title?

Can you clear your salvaged car and get a clean title for it? The answer to that is unfortunately no. Registering a salvage car under a clean title is considered fraud. But you might be able to fix it and get a rebuilt title, which opens up a lot of options for you. (For more information, read our “Buying Rebuilt-Title Auto Insurance: What You Need To Know“)

But changing a salvage title to a clean title is considered to be fraud.  CarFax defines title washing as fraudulently changing a title’s status so that the history of the car is wiped out.

This leads to previously totaled-out cars being given a clean title.

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Why don’t insurance companies want to cover salvage title cars?

Unfortunately, many previously totaled cars are not structurally sound. Restorers repair the obvious, but even a small hidden leak can do a lot of damage. When you’re talking about flood damage from a natural disaster, it’s impossible to know what all the water damaged.  Even if a part is deemed acceptable after the initial incident, it may not hold up for long.  (For more information, read our “Does auto insurance covers water leaks?“).

The National Motor Vehicle Title Information System tracks five factors that help reduce “title washing.” These are:

1. The current state of the title and its last date
2. The brand history
3. The odometer reading of the vehicle
4. Totaled out loss history
5. Salvage History

These steps help prevent title washing, which happens to 57,000 vehicles every year, according to GovInfo.

What companies offer salvage title auto insurance?

In complicated situations like this, insurance agents can provide unique expert advice. In some cases, insurance policies may cost you more, but you get the extra assurance of an extra set of eyes looking over your coverage and educating you.

Geico is one of the primary carriers that offers comprehensive insurance policies for rebuilt cars. The company assesses each case individually before making an underwriting decision. Factors such as previous damage and the type of damage are deciding factors. Some insurers may also look at the insured’s credit score and evaluate the certificate of title.

If you’re looking for the best coverage for your salvage car, we are here for you. Enter your ZIP code below to get free quotes from multiple insurers today.

How to Insure Salvage Title Cars

Salvage title cars are not impossible to insure, but the process will not be a simple task. A car that receives a salvage title will not qualify for auto insurance unless it can become a rebuilt title vehicle. Trade-ins are also difficult for salvage title cars.

Once a car receives a salvage title, its worth decreases by 20% to 40% from the Blue Book Value.

If you have a salvage title car, you’re probably wondering if it is eligible for salvage title auto insurance. The overall safety of salvage title cars can be questionable — they are not always safe to drive on the road, even after they have been repaired enough to qualify for rebuilt titles.

We’re going to go over your coverage options when it comes to auto insurance for salvage title cars, as well as which auto insurance companies you should consider and more.

Before learning about the insurance possibilities for salvage title cars, you should explore all of your auto insurance options. Enter your ZIP code to get a free quote today.

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Can you get insurance on a salvage title car?

A vehicle that receives a salvage title is not eligible for auto insurance. While it is not impossible, repairing a severely damaged vehicle to pass inspection can be time-consuming and expensive. In most instances, the only way a salvage title car can be insured is once it has been re-titled as a rebuilt title vehicle.

What are salvage title cars?

Salvage title cars are vehicles issued certificates indicating that damage is excessive and repair expenses will be costly. These certificates are typically printed on blue paper. Once a salvage title car receives its label, it usually isn’t worth repairing, and it is no longer safe to drive on the road.

Another issue drivers may come across is that salvage title cars can be challenging to sell. If you have a salvage title car and you’ve had no luck getting your vehicle insured, trade-ins at a dealership can be just as complicated to achieve.

What is the difference between a salvage title and a rebuilt title?

While salvage titles are usually blue, rebuilt titles are usually orange. Rebuilt title cars are vehicles that have been repaired to meet requirements that can re-certify it as drivable. One of the most important things to remember about salvage title cars is that an inspection may be required before your newly rebuilt title vehicle can get back on the road, depending on which state you’re in.

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What is the difference between a salvage vehicle and a total loss vehicle?

A vehicle that has damage beyond repair can be labeled as either a salvage title vehicle or a total loss. If the necessary repairs are made on a salvage title vehicle, it can be re-certified as a rebuilt title car. Unlike salvage title cars, once a vehicle has been labeled a total loss, there is very little chance of reviving it back to a drivable state.

After a car is labeled a total loss, some auto companies will also not be able to offer a buyback. A buyback allows the vehicle-owner to purchase their vehicle after it was totaled. It is safe to say that when comparing the two, a salvage title vehicle has a greater chance of getting insured than a total loss vehicle. 

How does a car become salvage?

There are several circumstances that could lead to the issuance of a salvage title:

• It was involved in a collision. If your vehicle was involved in a multi-car crash, there is a significant chance it can become a salvage title vehicle.
• It was damaged by harsh weather. If your vehicle was affected by extreme weather, such as a hurricane or severe rainstorm, it might result in a salvage title.
• It is uninsurable. If you’ve gone to several auto insurance companies and none of them are willing to insure your vehicle, then it may be time to accept that it is now a salvage title car.
• It has been vandalized. Defaced vehicles are likely to become salvage title cars.

It’s important to know that once salvage is stamped onto a vehicle’s title, you can no longer drive it on the road until it passes a series of tests to re-certify it as drivable.

Is it worth buying a car with a salvage title?

You usually get what you pay for with salvage title vehicles. Salvage title cars have attractive price points that may be appealing to those shopping on a tight budget, but can you put a price on safety? Since a salvage title vehicle has usually faced mistreatment that has compromised its structural integrity, all of its damage may not be visible at a glance.

Is it worth buying a car with a salvage title if you don’t have to? Generally, no. While the cost of your vehicle may be within your budget, the repairs and the insurance cost may not be as affordable.

According to Kelley Blue Book, the average cost of auto insurance in the United States is around $1,633. If you have a salvage title car, you can expect to pay insurance rates higher than the national average. 

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Can you register a salvage title car?

When it comes to registering a salvage title vehicle, there is no one-size-fits-all answer. Since each state has unique laws regarding what can and cannot occur with a salvage title vehicle, this can vary. However, most states will not allow a salvage title car to be registered until it can meet specific requirements. An inspection is required to ensure that a salvage title vehicle meets your state’s standards to redesignate it as a rebuilt title vehicle.

How much does a salvage title affect a vehicle’s value?

So you just find out your car has a salvage title, and you come up with the idea to sell it. But once it is labeled a salvage title vehicle, you should know that its value automatically depreciates. According to Kelley Blue Book, the industry rule of thumb is to deduct 20% to 40% from the Blue Book Value to calculate how much the worth has decreased.

Auto Insurance Companies That May Insure Salvage Title Cars

21st Century

21st Century Insurance has been proudly serving its insurance customers since 1958. The company received an A+ rating from A.M. Best for financial strength and an A+ rating from the Better Business Bureau (BBB). 21st Century exclusively provides auto insurance to the state of California.

Read more: 21st Century Auto Insurance Review

Geico

Geico has been providing affordable insurance policies to its customers since 1936. The company received an A++ from A.M. Best for financial strength, an Aa1 from Moody’s, and an A++ rating from Standard & Poor’s. Geico insures salvage title cars, and it has insurance policies available in all 50 states in the U.S.

Esurance

Esurance has been providing insurance policies since 1999. The company received an A+ rating from A.M. Best for financial strength, and J.D. Power rates the company’s auto insurance an 871 out of 1,000. Esurance provides auto insurance to 46 states, excluding Delaware, New Hampshire, Montana, and Vermont.

Everest

Everest is a reinsurance and insurance company that has been providing policies since 1973. The company received an A+ rating from A.M. Best for financial strength, an A1 from Moody’s, and an A+ rating from Standard & Poor’s. Everest provides auto insurance to 23 states, including Florida, Louisiana, Nevada, Oregon, Texas, Wisconsin, and West Virginia.

Infinity

Infinity is an insurance company that has been providing auto insurance since 1955. The company received an A- rating from A.M. Best for financial strength and an A3 from Moody’s. Infinity can offer the best car insurance for salvage title cars in 43 states in the U.S.

National General Insurance

National General Insurance was founded in 1920. It received an A- from A.M. Best and an A+ rating from the Better Business Bureau (BBB). National General Insurance provides auto insurance for all 50 states in the U.S.

Read more: National General Auto Insurance Review

Progressive

Progressive has been providing auto insurance since 1937. The company received an A+ (Superior) rating from A.M. Best for financial strength, an Aa rating from Moody’s, and an AA rating from Standard & Poor’s. Progressive can provide insure salvage title cars in all 50 states in the U.S.

Safeco

Safeco has been providing auto insurance since 1923. It received an A rating from A.M. Best for financial strength, and J.D. Power rated the company’s auto insurance an 872 out of 1,000. Safeco provides auto insurance for 47 out of 50 states in the U.S.

The General

The General has been providing insurance since 1963.  It received an A rating from A.M. Best for financial strength and an A+ rating from the Better Business Bureau (BBB). The General provides auto insurance for all 50 states in the U.S.

The Hartford

The Hartford was founded in Hartford, CT, and it has been providing insurance since 1810. The company received an A+ rating from A.M. Best for financial strength, and Standard & Poor’s rated the company’s insurance with an A+. The Hartford offers auto insurance policies in all 50 states in the U.S.

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Are salvage title cars worth insuring?

Now that you know the advantages and disadvantages of attempting to insure salvage title cars, will you be giving it a try? Although it is possible, insuring a salvage title car is challenging because most insurance companies will not allow it. However, if you decide to go with one of the companies on the market that may insure your salvage title vehicle, you can expect to pay car insurance rates much higher than you would pay on average.

If the pros outnumber the cons, you should consider repairing your vehicle so it can obtain rebuilt title status. If you do, you should know that this process might be costly, and it won’t be a walk in the park.

If you just found out your car has a salvage title after buying it, you may be able to sue the seller for not disclosing this. Get advice from a qualified legal professional.

Don’t begin the process of insuring your salvage title vehicle just yet. Enter your ZIP code and receive a free auto insurance quote today.

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