THURSDAY, MAY 20, 2021
Whether you've been involved in a car accident or you're shopping for a new vehicle, it’s important to understand what a salvage title is and its implications when it comes to car insurance.
What is a salvage title?
A salvage title, also referred to as a branded title, is given to a vehicle once it has been deemed a “total loss.” Different states have different criteria for deciding whether a salvage title should be issued. The state is responsible for issuing the salvage title. However, an authority must declare the vehicle a total loss first, such as the insurer of the vehicle.
What is the difference between a salvage and a rebuilt title?
A vehicle with a salvage title can be issued a rebuilt title. A rebuilt title is an indication that the car had previously been declared a total loss, but now meets or exceeds the qualifications necessary to be driven in the state. In most states, a blue title signifies that the car is a salvage while an orange title signifies that the car is a rebuilt.
Can you insure a car with a salvage title?
A car with a salvage title cannot be insured. The reason is that the vehicle has been deemed a total loss and is therefore unfit to be driven on the road. It is possible to buy car insurance for a vehicle with a rebuilt title. However, it’s often more difficult to insure a vehicle with a rebuilt title than a clean title.
In most cases, you will be able to get an auto insurance company to write a liability policy for a car with a rebuilt title. Still, many car insurance companies are reluctant to offer a full coverage car insurance policy for a vehicle with a rebuilt title.
When shopping for car insurance for a vehicle with a rebuilt title, it’s important that you compare at least three or four quotes. Some car insurers will add a surcharge for rebuilt title vehicles. However, not all insurance companies charge more to insure a rebuilt title vehicle. Before you choose a car insurance policy, you want to make sure that the amount you're paying in monthly premiums doesn’t exceed the amount of money you saved by getting a car with a rebuilt title in the first place.
If you want to buy auto insurance for a vehicle with a salvage title, you will need to have the state issue the vehicle a rebuilt title first.
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