Salvage cars are a favorite of many, from the do-it-yourself hobbyist who likes to restore junkers in his or her own time to the enterprising used car dealer who likes to offer super-inexpensive cars to customers with little in the way of financial resources.
However, if there’s one place in the automotive industry that salvage cars are almost entirely unwelcome, it’s the insurance sector. In fact, car insurance companies would rather not insure salvage cars at all if it was possible.
So why is this so? Furthermore, what can you do about it if you’re a proponent of salvage vehicles and you enjoy rebuilding them yourself? Here’s a quick overview on just those very topics.
Why Insurers Loathe Salvage Vehicles
To understand why insurers look askance at salvage cars, it’s important to understand how salvage vehicles come into being. Salvage laws can vary from state to state, but typically a car is declared salvage whenever it’s “totaled”, or when it’s written off by an insurer. This usually occurs when the damage a car sustains in an accident is more costly to repair than the value of the vehicle as a whole.
What this means to an insurer is that if you come to them with a rebuilt salvage car, they know that the vehicle was likely totaled in an accident somewhere in its past. Insurers also know that this rebuilt salvage vehicle, in order to be legally certified as reconstructed, more than likely had to pass a state-mandated inspection.
However, these inspections are much more concerned with whether the parts used in rebuilding the vehicle were sourced legally and not stolen. These inspections hardly even touch on the safety of the car or the quality of the work put into it, and for these reasons an insurer will often decline to provide coverage to a salvage car for anything more than the state minimum personal liability and property damage insurance.
This is of course bad news for anyone who would rather have their rebuilt salvage car fully insured with physical damage coverage in the form of either collision or comprehensive insurance.
How to Convince an Insurer to Provide You Coverage
You might think that you’re out of luck when it comes to getting physical damage coverage for your rebuilt salvage vehicle. The truth is that you can get around the fears, however justified, of an insurance provider. It’s just going to take a little bit of extra work on your part.
The idea of having to jump through additional hoops just to satisfy your insurer that the salvage vehicle you spent countless man-hours repairing is in proper working order might seem patently unfair to you, but there’s not much you can do about it if you want to get your car insured against any and all eventualities.
Thankfully, the process is rather painless, as all you’ll need to do is to submit your vehicle to yet another inspection. This time, it’s one conducted by an insurance agent instead of a state official, and it’s one that’s looking for physical damage or mechanical problems present in your vehicle.
This inspection usually entails an agent for your insurer carefully examining your car. Agents typically take several pictures of the outside of the car, paying close attention to any blemishes or visible signs of damage, and then assess the rest of the car by taking notes or filling out a checklist.
This information then gets sent back to the insurance company where an underwriter will examine it and make a determination as to whether your vehicle seems to be in good enough shape to warrant insuring it against physical damage. If your insurer decides your former salvage vehicle is a good enough risk, you’ll be offered a quote that includes comprehensive, collision, or whatever other type of physical damage coverage you originally requested.
You may not be particularly happy with the price of the quote you receive, as it’s likely to be moderately higher than for a vehicle of the same type and age that wasn’t totaled, written off, and then rebuilt, but it’s a small price to pay for some peace of mind after you’ve spent time, energy, and money in bringing your salvage vehicle back from the dead.