Now this is what you call an immediate response. Few moments ago, I just hit publish on my post titled totaled car insurance payout and here I have another related question in my mailbox from one of my readers. Clive asks, “Can you insure a car with a salvage title?” Short answer is, YES. It is possible to get car insurance for salvage title cars but you may have to dig deep and research. Generally car insurance companies do not offer insurance for cars with salvage titles. Some offer, minimum liability coverage only. This means, that you it will be very difficult to obtain full coverage auto insurance . In some cases, an auto insurance provider may also declare your vehicle as prohibited from their rate plan. It all depends on the insurance provider whether they are comfortable in providing you coverage.
How Does Car Insurance Work For Salvage Title Cars
Now there could be a possibility that either you own a car with a salvaged title or already have one. In both cases, to obtain minimum liability insurance coverage you will have to prove that your car is worthy to be on road again. This further leads to an inspection to be done on the car. The real problem is that when a car is declared a “total loss”, meaning the cost of repairs would exceed 75% to 80% of the value of the car.
Generally bigger and big brands car insurance companies would offer minimum liability coverage and lesser known providers might straight out reject cars with rebuilt titles. Another aspect to look at is that requirement for a salvage title differs by state. As an example, if you live in the state of Michigan, then a sign off is mandatory by the state police official on salvaged title cars before it is considered for reinsurance.
The reason why auto insurance for salvage title cars is difficult because it gets very difficult for the insurance company to calculate the true value of the car. Blue book companies like Kelly, don’t provide much information on how to really estimate the value of salvaged title cars. If you are successful in getting insurance for your salvaged vehicle, your premium will be quite high.
Insuring Salvage Title Cars – Premiums Vs Claim Payment
Another scenario where you may encounter when your salvaged car is insured is low claim payout. Generally premiums are high for salvaged cars, but if you are lucky enough to get the same rate as normal vehicles then also you may end up receiving a very low claim on your insurance payout. This generally happens due to lack of communication between you and the insurer. The entire strategy revolving around car insurance is that in case of car accidents you are able to recover the value of your car. Now, if you get very low claims payout then it does not make sense. To avoid such a situation, you need to ensure that your insurance provider while calculating your monthly or annual premium does not use the blue book value. In any case, for claims purpose they will use the salvaged value of your car.
Frequently Asked Questions – Salvaged Cars
Can I Insure A Car With A Salvaged Title?
Yes, you can. However most companies will only offer liability insurance only. You will not be getting comprehensive coverage and hence no payout of any collision.
What Coverage Is Offered In Case Of Salvaged Title Cars?
Generally, no collision coverage is offered because a claim was already made on the car and the vehicle was declared as salvaged (total loss). In most cases, you only get liability insurance which protects you against any lawsuit.
Any Specific Criteria To Obtain Salvaged Car Insurance?
First and the most important step is that you inform the insurance company about the extent of damage occurred on your vehicle. Some other documents which may be required are photographs of the car in damaged condition, details of all the repair work done and an inspection certificate from the DMV office.
How Can I Lower My Premium For A Salvaged Car?
Before you apply for insurance, get your salvaged car repaired to a condition wherein it is ok to be driven on road. Once this is done, get it inspected and obtain a certificate which helps in getting better insurance rates.
I hope now you know how to get insurance for your salvaged car. First and foremost check your states laws and get in touch with most of the auto insurance providers to compare rates and what they offer.