How to Insure a Rebuilt Title Car
When you’re car shopping, you might stumble across a deal that seems too good to be true. In these cases, check the car’s title. If the car has a rebuilt title — or, worse yet, a salvage title you could be left dealing with issues ranging from structural problems to challenges getting certain types of insurance.
You might be wondering, “What does salvage title mean?” or “What does rebuilt title mean?” In this guide, we’ll teach you the difference between rebuilt and salvage title cars, plus how your car’s title affects your ability to get insurance for it.
What is a salvage title car?
What does salvage title mean? Put simply, it means the car was once declared a total loss, or totaled. That means the insurance carrier that insures the car assessed its damage after an accident or an incident like a flood and determined that the cost to repair the car wasn’t worth it when compared against the car’s total value.
The threshold for a totaled car varies from state to state. In some states, insurers can declare a car totaled when the repairs cost 75 percent of the car’s value while other states require the repairs to cost 100 percent of the car’s value to declare it a total loss.
If your insurer is declaring your car a total loss but you don’t agree, check out this total (loss claim) history lesson for tips to help you navigate your next steps. Once a car is declared totaled, it has a salvage title. At that point, the car owner has a few options. They can sell the car to a junkyard, donate it, sell it for parts or — if they’re lucky — find someone who wants to take on the fixer-upper project so they can sell the car privately. Or they can choose to rebuild the title.
What is a rebuilt title car?
Now you know what a salvage title is, but what does rebuilt title mean? To take a title from salvage to rebuilt, two things need to happen. First, the car needs to be repaired to a satisfactory condition. Then, the car needs to get inspected by the DMV. This usually means towing the car to the inspection site and paying a fee for the inspection.
Assuming the car passes the inspection — meaning it’s safe to drive in its current condition — the DMV declares the title rebuilt. The car owner can then secure the rebuilt title with a little more paperwork.
The difference between rebuilt and salvage title cars
The primary difference between rebuilt and salvage title cars lies with a distinction made by the DMV. A salvage title car could be fully repaired and safe to drive, but its title doesn’t get rebranded as rebuilt until the DMV has properly inspected the vehicle.
While that might seem like a technicality, it’s one that matters when you’re car shopping. In most cases, you can’t buy a salvage title car. If a private seller is listing a car with a salvage title, be wary. Unless you’re a mechanic and you know how to rebuild a car, it’s best to steer clear.
Plus, salvage title insurance can be extremely challenging — or outright impossible, in some states — to find.
A rebuilt title, on the other hand, is a red flag but not necessarily a deal-breaker. Because the title’s rebuilt, you can rest easy knowing that the car was repaired sufficiently enough to pass DMV inspection.
A rebuilt title doesn’t mean you’ll never experience problems from the incident that totaled the car, though. If the car experienced flood damage, for example, the repairs just get the car up and running. It’s highly likely its internal electrical and mechanical components are compromised because of the water damage.
If you can learn about what caused the car to be totaled, you can feel better about buying a rebuilt title car. If it was totaled by a hail storm, for example, you can rest easy knowing the key components of the car probably weren’t compromised. If you aren’t able to learn more about the car’s history and you choose to buy it with a rebuilt title, don’t be surprised if issues crop up down the road. On top of all that, a rebuilt title can create a headache when buying insurance for your ride.
How does a rebuilt title affect my insurance?
Usually, you’ll be able to get car insurance for your rebuilt title car, but don’t expect to be able to lock down broad-spectrum protection with your auto insurance. Most insurers are wary about the heightened risk that comes with a car that was once declared a total loss. They know that there could be hidden issues that increase your likelihood of filing a claim.
In fact, some insurers won’t offer any kind of insurance for a rebuilt title. Still, a lot of larger insurers are willing to offer rebuilt title insurance coverage for your ride — to an extent.
What coverage can I get on a rebuilt title car?
In many cases, insurers will only offer liability insurance or cheaper car insurance for your car. That means you can get the bodily injury and property damage liability insurance you need to legally drive in your state, but your protection might stop there. It’s uncommon to be able to get comprehensive coverage for a rebuilt title car, for example. That means you’re not protected against things like theft, vandalism and falling objects.
Several large insurance providers such as Geico, State Farm, Progressive and Allstate do offer at least liability coverage for some cars with rebuilt titles, but it depends on the state in which you live, your car and other factors.
The best way to find out if you can get the rebuilt title insurance you need is to reach out to a few insurers and see. We rounded up the best car insurance companies as well as the average cost of car insurance to give you a starting place.