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Salvage Cars Car Insurance

Can I Insure a Salvage Car in Arkansas? 

By Mike Richards Updated: 07/25/2017 Posted: 10/17/2015

In many cases, a vehicle involved in a traffic accident might be totaled – written off, in other words – by an insurance company because it would be less expensive for them to simply pay the owner the value of the car instead of paying for the repairs.

In some cases, these totaled cars are junked. These cars are often destroyed, stripped for scrap metal, or parted out. However, in many cases these vehicles can be bought outright as salvageoften through a car auction – and the new owner can then go about restoring them to working order.

However, since it’s illegal to operate a motor vehicle in any state – Arkansas included – without having the vehicle registered and insured, if you have a salvage car in Arkansas that you want to put back on the road there are some things that you must do beforehand.

What Is a Salvaged Title Vehicle?

According to the state of Arkansas, a salvage vehicle is a vehicle that has at least one of the following characteristics:

  • The damage must be at least 70% of the value of the car.
  • The car must have been flooded up to dashboard level.

Once a vehicle has been issued a salvage title, it can no longer have a “clean title”. At best, it can get a “rebuilt title”, after it has been repaired.

Buying and Restoring a Salvage Car in Arkansas

You’re likely to get a great deal on a salvage car that has been in an accident serious enough for it to be written off. However, you’ll need to ensure that your vehicle can be titled and registered as a rebuilt car, or you won’t be able to drive it.

In Arkansas, you’ll need to bring proof to the Office of Motor Vehicles that not only do you own the salvage car but also that you have all the parts needed to repair the vehicle. You’ll have to supply Arkansas OMV with a filled out Affidavit of Reconstruction for a Salvage Motor Vehicle, in addition to full records on the parts you used to reconstruct your salvage car. If you contracted out the repair work instead of doing it yourself, you’ll also need records of these repairs as well.

Thankfully, once you can prove to the OMV not only that you own the vehicle in question but that you’ve put in the time, money and effort to get it repaired once more, you should be able to have it registered in your name and a rebuilt title issued to you.

Insuring Rebuilt Salvage Cars

Now that you’ve got your car registered by the Arkansas OMV and your new plates are on it, you’re going to need to get it insured in order to drive it once more. However, this can be a difficult and frustrating task sometimes, since insurance companies are often reluctant to insure a vehicle that has been salvaged – in fact, in some instances an insurer will flat-out refuse to offer you cover if you have a rebuilt title.

The reason behind this is that insurers don’t know what kind of work was put into a salvage car to make it roadworthy again, and that means there’s some uncertainty as to its safety. Since insuring vehicles is all about minimizing risk on the part of an insurance company, insurers hate uncertainty – and that means you’re likely to either encounter companies that will decline to cover you outright or charge you some rather unappealing insurance rates.

However, it’s typically easier to get minimal cover for a rebuilt salvage car. If you’re only interested in getting coverage for personal liability and property damage, a good number of insurance companies will be willing to work with you. Since there’s no need for an insurer to cover any damage to your vehicle, insurance companies are much more willing to take you on as a policy holder. When it comes to getting physical damage coverage, though, that’s much more difficult.

Jumping Through Hoops

An insurer will only provide you physical damage coverage like comprehensive or collision on your rebuilt salvage car if you fulfill a set of very demanding criteria. You could have to have your car subjected to some major mechanical inspections in many cases – and even if your rebuilt vehicle comes through with flying colors, you still might face high premiums as a result.

However, if you’ve just spent considerable time and money restoring a salvage car into good working condition, you’ve already invested quite a bit into the vehicle, insuring that investment just makes sound financial sense.

Read more on the official Procedures in This State, or on Rebuilt Title Laws for Other US States. Explore our Vehicle Auctions and find info on Buying With Us.

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