How to Get Car Insurance with a Salvage Title

If you’ve ever considered buying a car with a salvage title, you already know it comes with unique challenges—especially when it comes to insurance. With rising car prices, supply chain disruptions, and an increasing number of natural disasters (hello, climate change!), salvage-title vehicles are becoming more common. But can you actually insure them? The short answer is yes, but it’s not always straightforward.

What Is a Salvage Title?

A salvage title is issued when a vehicle has been declared a total loss by an insurance company. This typically happens when the cost of repairs exceeds a certain percentage of the car’s value (usually around 70-75%). Common reasons include:

• Major accidents
• Flood damage (thanks to worsening hurricanes and floods)
• Theft recovery (if the car was stripped or heavily damaged)
• Hail or fire damage

Once a car gets a salvage title, it can’t be legally driven until it’s repaired, inspected, and re-titled as "rebuilt."

Why Insuring a Salvage Title Car Is Tricky

Insurance companies are risk-averse, and a salvage title screams "high risk." Here’s why:

1. Lower Market Value

A salvage title slashes a car’s resale value by 20-40%. Insurers base payouts on actual cash value (ACV), so they’ll only cover a fraction of what a clean-title car would get.

2. Safety Concerns

Even if a car looks fine after repairs, hidden structural or electrical issues could make it unsafe. Insurers don’t want liability if the car fails later.

3. Higher Fraud Risk

Some rebuilt salvage cars have sketchy repair histories. Insurers worry about insuring a car that might have been poorly fixed or even "washed" (title fraud).

Steps to Get Insurance for a Salvage Title Car

1. Rebuild the Title First

Most insurers won’t touch a salvage-title car unless it’s been rebuilt and re-registered. The process varies by state but usually involves:

• Completing all necessary repairs
• Passing a state inspection
• Applying for a "rebuilt salvage" title

2. Shop Around for Specialty Insurers

Mainstream insurers like State Farm or Geico might reject you, but these companies often cover salvage titles:

• Progressive
• Dairyland
• The General
• SafeAuto

3. Expect Limited Coverage Options

• Liability-only is the easiest to get (and often the only option).
• Collision/comprehensive may be available but with strict conditions.
• Agreed value policies (for classic/rare cars) are rare but possible.

4. Provide Documentation

Insurers will ask for:

• Rebuilt title paperwork
• Repair receipts
• Inspection reports
• Photos of the repairs

5. Be Ready for Higher Premiums

Salvage-title cars often cost more to insure because insurers see them as higher risk. However, if the car is older or has low value, you might save money by skipping full coverage.

Creative Workarounds

1. Use a Non-Standard Insurer

Some smaller or regional insurers specialize in high-risk vehicles. They might offer better terms than big-name companies.

2. Consider a "Named Insured" Policy

If you’re insuring a salvage car for parts or as a project vehicle, some insurers offer limited coverage for non-driving use.

3. Self-Insure (If Legal in Your State)

If the car is cheap and you can afford to replace it out of pocket, you might skip collision/comprehensive and just carry liability.

The Bigger Picture: Why Salvage Titles Are More Common Now

• Climate disasters (floods, wildfires) are totaling more cars.
• Supply chain issues make repairs costlier, pushing more cars into salvage status.
• Economic factors make cheaper, rebuilt cars attractive to budget-conscious buyers.

Final Tips Before You Buy a Salvage Car

• Get a pre-purchase inspection (PPI) from a mechanic who knows salvage vehicles.
• Check the VIN history (Carfax, AutoCheck) for red flags.
• Verify rebuild requirements in your state—some are stricter than others.

Insuring a salvage-title car isn’t impossible, but it takes extra effort. With the right approach, you can protect your investment and stay legal on the road.