What is Salvaged Car Insurance?

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What are Salvaged Cars?

Salvaged cars receive this designation when an auto insurance company determines that the cost of repairs is higher than the value of the car. For example, if a car was involved in an accident and costs $4,000 to restore it to previous conditions, but is really only worth $2,000 – it would be written off as a total loss. In most states, it is the responsibility of the auto insurance company or the car owner to report to the DMV that the vehicle has been totaled.

Depending on the state, the car will be issued a “Salvage Title” or a “Salvage Certificate” that lets any future buyers know that an insurance company has deemed the car a “salvaged vehicle”. A certificate is different than a title. What this Salvage Certificate means is that the car cannot be legally sold, driven, or registered in its current condition. On the other hand, a Salvage Title means the car has been rebuilt to roadworthy condition. If all qualifications are met, the car can be issued a new title, but with a designation that the vehicle had been salvaged or rebuilt (i.e. “Revived Salvage”).

Questions to Ask Before Buying a Salvaged Car

There are many reasons a person may want to buy a salvaged car. If you aren’t sure of the benefits or disadvantages you need to ask yourself these questions:

  • What is the reason that the car is totaled?
  • Is the car a "salvage" or "non-repairable" vehicle, which can only be legally sold for parts?
  • What are the laws in your state regarding insurance and registration?
  • Can you get comprehensive and collision coverage, or only liability coverage?
  • Can you afford to pay for repairs out of pocket if your car is damaged in an accident?

It is highly recommended that you get a full accident report, the original repair estimate and the documentation of all repairs.

Getting Salvaged Car Insurance

In most states, it can be a tremendous hassle to get a legal title on a vehicle that has been considered a salvage. You may need to get multiple inspections, provide proof of ownership and to determine total cost for all the repairs. Aside from your state regulations, you also have to consider the rules of the insurance company; some companies will not insure a car that has been declared totaled or limit the coverage in one or more ways.

These steps below can help you find the best coverage for your situation:

  • Follow your state laws –Gather the correct documentation to start the process
  • Get the original repair estimate if you can
  • Check with your current insurer if you have one - your car insurance agent can tell you if your car insurance company will extend coverage for salvaged vehicles and under what circumstances
  • Check with other insurance companies – Other companies may offer better coverage options and rates for totaled cars
  • Look for “salvage insurance” online – Search for even more options from companies that specialize in salvage insurance
  • Opt for Liability Insurance only – It may be cheaper and more reasonable. Talk to your Insurance agent to see if this is a good idea for your situation
  • Expect to pay higher premiums
  • Read the policy carefully – Check for any limitations to your coverage

It’s not easy finding the best insurance coverage on your own. Working with an Auto Insurance Specialist at AIS can help you reduce your stress and provide you the best options. We already have partnerships with over 30+ insurance carriers, so AIS auto insurance agents know where to look to get you the coverage you need for a salvaged car. Give AIS a call to learn more about getting Salvage Car Insurance.

The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.

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