Every state in America has its rules regarding vehicle insurance and their various policies. When it comes to insuring a vehicle that is noted as salvage on the title, these differences become even more important to understand. The exact details need to be considered on a case-by-case basis. So you will want to look up the specific rules for your state before making a final decision.
However, there are some general guidelines that can be broadly applied to help you understand salvage insurance rules in your state.
The Difference Between a Salvage Certificate and Rebuilt Title
It is important to note that it is virtually impossible to get insurance coverage for a salvage car that is no longer in drivable condition. In such cases, a salvage certificate will actually be attached to the car or truck. This basically means that, in its current condition, it is not possible to sell, drive, or even register the car. As such, it cannot be insured.
Many wonder why anybody would even purchase such a vehicle, but that comes down to personal preference. Many salvage cars or trucks can be repaired, and some actually enjoy doing so. Others might be bought for a very cheap price, fixed up, and then serve some type of purpose that suits the desire of the new owner.
Whatever the reason might be, no state will permit a vehicle with a salvage certificate to actually be driven until the title is changed to “rebuilt” or some similar designation. To get to that point, however, some major repairs may need to be done.
Once a vehicle is adequately repaired to the point that it is roadworthy, the current owner can apply for a new title. At that point, if it is granted, the title will always carry some type of designator indicating that it was a salvaged car. No state allows the designator to be legally removed, which is why it is often difficult to obtain full and comprehensive insurance coverage for such cars.
Advantages and Disadvantages of Salvage Vehicles
No matter what state you are looking to possibly insure a vehicle with some type of salvage designator on the title, you should first weigh the pros and cons of even doing so. Individuals who have purchased such cars or trucks in the past often mention the following three advantages.
- The Price is Attractive – Once a vehicle has been salvaged, even if it is rebuilt to perfect working condition, the sticker price will typically be only a small fraction of what a similarly positioned car or truck with a clean title would carry.
- Save Money – When the insurance company considers a vehicle as salvage, they will give the owner of the vehicle a predetermined amount in compensation for the car or truck. This is assuming the insurance policy contains coverage for such a situation. At that point, the obligation on the part of the insurance company is complete. The customer gets the money, and they would usually take that and purchase a new vehicle. They are usually under no obligation to do so, however, and some opt to keep the money, get the car back home, and repair it themselves. Some will have their own mechanic work on the vehicle. Whatever the situation, it could be financially advantageous in the end to do so, and end up putting money back in the pocket of the customer.
- It Can Be Fun – Remember that cars and trucks are tools to some people, and hobbies to others. Many people enjoy the process that goes into rebuilding a salvage car or truck. If this is you, there are many ways to pick up such a vehicle at rock bottom prices, and this alone could be a good incentive to do so.
Naturally, there are some disadvantages to note as well, so consider some of the following as you think about getting insurance in your state.
- Safety May Be Compromised – Most people want to feel safe in their vehicle, and driving around in a car or truck that has undergone so many repairs can be frightening.
- Some Damage Can Be Hidden – Some salvage vehicles undergo so much damage that it might not be noticeable until some point in the future. While you might think that everything has been suitably repaired, there is always the lingering fear that there is a major repair lurking right around the corner. If you rely on the vehicle for transportation, and you are on a budget, this is often a deal breaker for many.
- More Documentation is Needed – Just to get the car to where it can be driven again will require more paperwork and inspection than the average car owner is used to, or comfortable with. This documentation is not only necessary in order to get the title in working order so the car or truck can be licensed, but is necessary to even have any hope of getting insurance coverage.
- Car Insurance Is Difficult To Find – That brings us to the main issue. Depending on your state, insurance for a vehicle that was, at one time, in salvage condition, can be difficult if not impossible.
The bottom line governing insurance coverage and salvage vehicles is to look for the specific guidelines in your state. Upon doing so, you will have a good picture of what is needed and then can begin shopping around for your best options.