Salvage Defined (2024)

The title to your car is proof that you own it. As long as it’s in your name, your state DMV recognizes that the car belongs to you. Usually, you get a clean title when you buy a car, especially if it’s a new vehicle. However, there are other types of titles to look out for if you’re on the hunt for a new vehicle.

Salvage and rebuilt titles are issued to cars that have sustained enough damage that they had to be declared a total loss. Salvage titles let potential buyers know that repairs will have to be made to the vehicle before driving it or putting a liability auto insurance policy on it.

So, what does salvage mean, and can you get insurance on a salvage car? Some companies won’t insure a rebuilt or salvaged car, but you can enter your ZIP code into our free tool to see what quotes might look like for you.

What does salvage mean?

When someone describes a car as “salvage,” it means that it was damaged badly enough that it was more cost-effective for an insurance company to declare it totaled and pay the policyholder for its value.

Cars can be declared a total loss for a variety of reasons. The most obvious example that comes to mind is a car accident, but salvaged status can also come from floods, fire, vandalism, and theft. In fact, it doesn’t matter how a car is damaged. As long as repairs cost too much, the vehicle will become salvaged.

People use salvage and rebuilt titles interchangeably, but they mean different things. An easy way to tell what you have is by the color of the paper:

• Green titles are clean
• Blue titles are salvaged
• Orange titles are rebuilt

Don’t worry if you’re still confused or your title has a different color. An insurance agent can help you decipher your title and what coverage you need.

How do insurance companies decide when to declare a car totaled? It depends on the company, but it’s usually when repairs cost more than a large percentage of the car’s worth. Most companies set the damage threshold between 75% and 90% of the car’s total value. Once a car has crossed that threshold, the insurance provider sells the vehicle to mechanics or auction sites. If your car has been declared totaled, you can keep your vehicle and try to repair it on your own time.

Can you fix a salvaged car?

It’s not always possible, but you can sometimes repair a salvaged car. You can tell a salvaged car has been adequately repaired when it has a rebuilt title. Laws vary by state, but a salvaged car usually has to pass a rigorous examination before it’s eligible for a rebuilt title.

Before you buy a car with a salvage or rebuilt title, make sure to check your state’s laws. For example, it’s easier for a salvage title to get a rebuilt title in Texas than in California. Once a salvaged car has passed an examination and receives a rebuilt title, you can safely and legally drive it on the street again.

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Can you get salvage title insurance?

Since it’s illegal to drive a salvage car, you won’t find a reputable insurance provider that will offer you a policy. However, rebuilt titles are street-legal. Most insurance companies will work with a rebuilt title (though there are a few exceptions). Insurance companies that sell to rebuilt car owners are usually not willing to give you more than liability coverage.

Unfortunately, insurance for vehicles with rebuilt titles costs more than cars with clean titles. Insurance companies consider rebuilt cars riskier because there could be underlying damage that no one knows about.

Since rebuilt cars lose up to 20% of their value, you’ll also receive a small payout if you ever need to make a claim. Your rebuilt car isn’t worth as much as the same model with a clean title. Your insurance company wants to make sure it isn’t spending too much money on a rebuilt car.

Can you get full coverage on a rebuilt title?

Finding full coverage on a rebuilt title is more challenging than liability-only, but it can be done.

It’s challenging to buy full coverage for a rebuilt title because it’s hard to determine the car’s value. Your provider will have difficulty determining what damage was already present if you ever need to make a claim. Even cars that are certified safe to drive after a thorough mechanic exam could have undiscovered damage. Undiscovered damage usually shows up down the road when you least expect it. This danger is why insurance companies are hesitant to fully insure rebuilt cars. Insurance companies assume that a rebuilt car is more likely to make a claim. You need a minimum amount of liability coverage in most states, and you can find that. It’s full coverage that can be tricky.

What is the best insurance for rebuilt titles?

Despite the fact that rebuilt titles are legal to drive, some insurance companies won’t cover them. If you already have an insurance policy, you can ask your agent if your rebuilt car can be added to it. If you don’t have insurance (or they won’t cover your new car), consider the following companies:

• State Farm
• Allstate
• Geico (additional inspections are required before your insurance goes into effect)
• MetLife (liability only)
• Farmers
• Progressive (full coverage offered for specific models)

Most companies have specific requirements that you’ll have to meet before they sell you coverage for your rebuilt car. You’ll probably face limitations on your policy as well. It’s vital that you compare insurance quotes to get the best deal possible.

How do you get insurance for rebuilt titles?

Getting insurance on a rebuilt title might sound confusing, but the process doesn’t need to be stressful. Rebuilt cars require more work to get them street-legal, but the effort will be well worth it after you can drive your car.

Take the following steps to secure insurance for your rebuilt car:

• Make sure you have the correct title. If your car has a salvage title, you can’t drive it, and insurance companies won’t insure it. Save yourself a headache and make sure you have the right title before looking at insurance.
• Get a certified mechanic’s statement. This statement assures your insurance company that a mechanic has gone over the entire car looking for potential problems.
• Shop for coverage. Normally, you’d consider what type of coverage you want on your car. Most companies only offer liability, so you’ll have to do a little searching to find a company that will give you more than that.
• Compare quotes. It’s always important to compare quotes when you’re looking for new insurance, and this is especially true when you have a rebuilt car. Prices tend to be higher on rebuilt cars, this step can help you save money.

These four steps are the basis for getting the best insurance policy to protect your new car. When you have an idea of what insurance company you want to buy from, one of their agents can help you make the most of your coverage.

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Is it worth buying a car with a salvage title?

Depending on what you plan to do with it, a car with a salvage title can be a great buy. Whether you want it for parts or to fix it up and drive it, salvage cars can be a great deal.

Now that you can answer, “What does salvage mean?” you should be ready to find insurance if you plan on fixing a salvage car. Enter your ZIP code into our free tool to see what quotes might look like for you.

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