Does a salvage title affect insurance?

The Affects that salvage Titles have on Insurance Companies

Does a salvage title affect insurance? What steps do you take to rebuild a title if that is a possibility within your state? Depending on the particular state you live in, Salvage titles can be a tricky situation. In general, there are used car lots that have the inventory that was traded in but considered totaled from their insurer for whatever reasons, but there can be a road bump for the buyer and the particular dealer. Those road bumps can range from whether a location has state inspections, overall safety as far as the repairs go, the current condition of the vehicle, and how it can affect auto insurance companies.

On the contrary, it can be a positive option for those who are on a budget looking for the “deal.”

Understand Insurance Companies Offer

Understand that most auto insurance companies offer limited coverage to no coverage at all depending on the total cost of repairs. If the total cost of repairs happens to exceed the value of the vehicle, then the insurance company will not cover the vehicle. There are some insurers that would not offer the comprehensive coverage of this predicament.

There are many cases where liability coverage is offered, but it does not cover physical damages. If the repairs are certified, it should be up to the standards and at an equilibrium with an automobile that has not been rebuilt or wrote off as a total loss with no difference in risk. In some cases, it is an insurance company taking a risk on the owner when they have a salvage title.

If the automobile is totaled out, Insurance companies pay the actual cost value minus the applicable deductible. The actual car value is determined by the fair market value of the vehicle from its current standing and from the time the vehicle is totaled out. There are some insurance companies who offer replacement value for your vehicle in order to make up for the depreciated value. This is something that has to be offered by the particular insurance company.

Situational Aspects Salvage Title Affect Insurance

There are situational aspects such as the insurer would evaluate if a vehicle is a totaled. Those different ways consist of hail damage or flood damage aside from just being salvage. insurance companies take all this into consideration depending on the circumstances. For example, there are dealerships in different states who might have a new shipment of inventory coming right off the truck onto their lot. Mother Nature takes its course and a hail storm occurs.

This is definitely an unfortunate situation for the particular dealer, and the reason this is being brought up is that the dealer can have the damages repaired and still sell the vehicle, which does not affect car insurance on covering the “hail damaged” vehicles.

It is ideal to be fully aware of what your particular state’s rules are on how to obtain certain coverage for a salvage title. In some cases, there can be some paperwork plus the individual would have to provide the documentation on the nature of the repairs and the original damage.

From this point on it must be important for you to protect your investment, so be prepared to most likely pay a higher premium. Be aware that there is a huge difference from a salvage title to a rebuilt title as well. Again, depending on your location, taking the correct steps towards having a rebuilt title also involves another inspection which ultimately is the deciding factor.


Lastly, These are points to be taken into consideration when dealing with salvage titles and the effects it has on your auto insurance. If you are a person looking for a specific make for a fraction of its Manufactured sales retail price, then this might be an option, but keep in mind that most insurance companies would offer liability coverage and not offer comprehensive coverage.

Just remember the advantages and disadvantages in this case and how you can apply this to your decisions if faced with this predicament. Also, keep in mind that every state has there own laws on how to go about salvage titles. In most cases, you can obtain liability coverage but some states will just call the vehicle a total loss and not except the cost of repairs which is more out of their pockets than the live market value of the vehicle.

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