There’s a lot to love about a salvage car. They’re inexpensive to purchase, especially since the primary source of salvage vehicles is through online and in-person car auctions that are open to the public and everyone can view available lots, for example, insured auto auction. This makes it easy to pay pennies on the dollar for all sorts of salvage cars.
Of course, these advantages don’t come without drawbacks. Salvage cars have been classified as salvage, after all.
While the definition of salvage may differ slightly from one state to another, for the most part it means that the vehicle has been in some sort of accident where it’s sustained so much damage that it’s just not cost-effective to repair. As a result, the original car owner’s insurance company wrote the car off instead – “totaled” it – manager cut a check to the owner, and hauled off the broken-down car to be sold off at auction.
Luckily, you can rebuild a salvage car and get it road-legal once more. This involves physically repairing the damage it sustained, getting it inspected by the state, and then getting a clean “rebuilt salvage” title before registering it. However, this also means you’ll have to insure it as well – and that’s where some salvage car owners run into difficulties.
Yes, Salvage Cars Are Insurable
Many people may deride the idea of buying a salvage car with an eye towards restoring it, remarking that it will be “impossible” to insure the vehicle once you’re done.
While there is a grain of truth in what they’re saying – it is, after all, impossible to insure a salvage vehicle before getting it restored – once you’ve satisfied your state’s requirements for re-classifying your salvage car as a rebuilt or reconstructed one, it’s not only possible to get your rebuilt salvage car insured, but it’s a legal requirement.
Each state has a different minimum amount of insurance that you’re required to keep on any car that’s registered to you and that you’ll be driving. In general, you’ll be required to keep what’s often referred to as “PLPD” cover, or Personal Liability and Property Damage insurance, before you can drive your car legally.
However, there’s a reason this is considered “minimum” coverage. It offers no protection against any physical damage that might occur to your vehicle. This is why so many drivers prefer to have either collision coverage, comprehensive coverage, or both on their car – even one that might not be worth much because it’s a former salvage car.
Striking a Deal with Insurance Companies
The problem with obtaining higher levels of insurance on a rebuilt salvage car is that insurance companies tend to avoid providing coverage to these types of vehicles. Not only is a reconstructed salvage car a former write-off from another insurer, there’s never any way of knowing if the repair job done by the salvage car’s owner or his or her mechanic was sufficient enough to fix any issues with the vehicle that might lead to next accident on the road.
It’s just a poor risk for many insurance companies, and with insurers building their business on managing risk, many of these companies will either offer exorbitant premium price quotes – or simply decline to cover the vehicle altogether.
If you’re thinking that this sounds suspicious, considering how most states require a rebuilt salvage car to be inspected by an official from its department of transportation or a state police officer, you’re going to be in for a rude awakening: these state inspections often leave much to be desired when it comes to determining if the car is in drivable shape or not.
The most important things that state officials are looking for when inspecting rebuilt salvage cars is that the Vehicle Identification Numbers (VINs) match between the paperwork and the parts themselves. It’s essentially a check to ensure that no undocumented or stolen parts were used to rebuild the car. This has little to nothing to do with whether these parts work properly, or if the car is safe enough to drive to the standards of an insurance provider.
So how can you fix the problem? Many insurers will let you set up an appointment to get your car inspected by an agent after phone call or sent fax to company. This inspection is geared towards documenting the physical state of the car and any damage it might have.
Once this is done, insurers feel much more comfortable in providing higher levels of cover. Just let that agent take a few notes and snap a few pictures and you may get the insurance coverage you need.