While it is certainly possible to obtain insurance for a vehicle that has been salvaged, there are many things that you will want to take into account before you decide to take on such a risk.
For one, you need to realize that a salvaged vehicle will have a value, as determined by the insurance company, that is a mere 30% of the Kelley Blue Book value of a similar vehicle that has not been damaged. In some cases, it can even be worth less than 30%, so that is something to consider as well.
You should contact your insurance company to ascertain the perceived insurance value of the car prior to purchasing it. Beyond that, there are some other aspects to the insurance process for salvaged vehicles that you need to be aware of.
How Did Your Car Get To This Point?
When a vehicle is involved in a serious accident, the normal course of action is to have it towed to a mechanic or local repair shop. In many instances, it might be advisable to take the car straight to an appraisal center to determine what your options might be.
In that case, the insurance company will send out an adjuster to inspect the damage and issue their final appraisal. If they consider the vehicle to be a near total loss, the process will be in play to label the car as being salvaged. It is at this point that most people will take whatever remains of their belongings with them, and then allow the salvage company to do whatever they want with the car – usually selling it at auction.
If the car has ample insurance coverage, a lump sum amount will be given for the car, usually for replacement value, and the owner will just cut his or her losses. Some people, however, may opt to retain control of the vehicle, get it home, and possibly repair it themselves.
What Do Salvage Repair Companies Do With the Vehicles?
Many people wonder what the companies or individuals who take ownership of salvage vehicles end up doing with them. It really depends on how much damage there is, which in the end will impact their ability to fix the car and get it into insurable condition once again.
If, for example, the engine is in working order, but the body of the car is beyond repair, they might opt to just sell the engine outright. It is also possible that the company or individual might just take the entire car apart and sell whatever parts they can for whatever value they can get.
In other situations, there might be the possibility of repairing the car or truck even though the insurance company has declared it a total loss. It is in this circumstance that the car may be completely rebuilt into proper working condition, pass a basic inspection, and be sold to a new customer at a later date.
If the salvage repair company opts not to repair the car at all, they can still sell the car to a customer who agrees to take responsibility for all of the damage to the car as is. In such situations, the car would not immediately be insurable, as it is not in working condition and cannot be licensed by a state motor vehicle agency.
Is It Even Possible To Get Insurance for A Salvage Car?
You will need to do some shopping around to find alternatives if you are really keen on keeping a vehicle in a salvage state. Some companies will not offer insurance for the vehicle, while others will enable them to be insured once they have been rebuilt and have a title stating as such.
Remember that a car with a salvage title cannot be driven until it is proven to be roadworthy, and this can only take place once it has passed a basic inspection as mandated by your state’s motor vehicle agency.
You should also be aware that many of the insurance policies that are offered for salvage cars would not offer you much in the way of coverage. You can almost be assured that comprehensive collision insurance will not be provided.
In many cases, however, owners of salvage vehicles will not be looking to have this coverage in the first place, as the car is relatively inexpensive and serves a different purpose for them. In these cases, basic insurance coverage that meets the state minimums might be all you need. If that is the case, do your shopping and compare policy terms to determine what is best for you and the vehicle you have chosen to purchase with a salvage title.
You need to determine if you are worried about theft. If you have purchased what is considered to be a vintage automobile, or you live in a high crime area, you will either need a safe place to store the car or be in a financial position to absorb the loss in the event that it is stolen.
It is also important to note that should a salvage title car ever need to be repaired again, the value will always be determined at the same 30% or less of the actual blue book value of a similarly positioned vehicle in the same class. The only exception to this might be for a car or truck that is considered to be a classic.
In the end, deciding to either keep a salvage car, or to purchase one outright, is best taken on a case by case basis. Everyone has a different reason for wanting such a car, so whatever that reason might be, just be aware that obtaining insurance for the vehicle might be a bit tricky and require some research on your part.