So, you’ve found a great deal on a car with a salvage title. Maybe it was in a fender bender, caught in a flood, or recovered after theft. Salvage vehicles can be a smart way to save money, but when it comes to insuring them, things get tricky. A salvage title means the car has been declared a total loss by an insurance company. That doesn’t necessarily mean it’s unsafe or unworthy—but it does mean you’ll face extra hurdles getting it back on the road and properly insured.

In today’s world, where supply chain issues, inflation, and climate-related disasters are making both new and used cars more expensive, salvage vehicles have become an attractive option for budget-conscious buyers. But navigating the insurance process requires knowledge, patience, and a clear strategy.

What Exactly Is a Salvage Title?

A salvage title is assigned to a vehicle that has been damaged to the extent that the cost of repairs exceeds a certain percentage of its value—usually between 50% and 90%, depending on the state. Common reasons include:

• Accident damage
• Flood or water damage
• Hail or fire damage
• Theft recovery (after being stripped or vandalized)

Once a vehicle is branded salvage, it can’t be registered or driven legally until it’s repaired, inspected, and re-titled as “rebuilt.”

Why Insuring a Salvage Car Is Different

Insurance companies view salvage vehicles as high-risk. These cars have a history of significant damage, and even after repairs, there may be hidden issues. Because of that, many major insurers are hesitant to offer full coverage. You might find that some companies outright refuse to insure salvage-title cars, while others offer limited policies.

Step-by-Step: How to Get Insurance for Your Salvage Vehicle

1. Repair and Rebuild the Vehicle Properly

Before you even think about insurance, you need to make sure the car is safe, functional, and legally eligible to be rebranded as “rebuilt.” Each state has its own process, but generally, you’ll need to:

• Complete all necessary repairs using quality parts.
• Keep all receipts and documentation of repairs.
• Pass a state-administered inspection to verify the car is roadworthy.

Once the vehicle passes inspection, you’ll receive a “rebuilt salvage” title. This is critical—insurance companies will not insure a vehicle that still has a salvage title.

2. Shop Around for Insurance Providers

Not all insurance companies offer policies for rebuilt salvage vehicles. You’ll need to do some research:

• Start with smaller, regional insurers or specialty providers that focus on high-risk or classic cars.
• Use online insurance comparison tools and be upfront about the car’s history.
• Consider working with an independent insurance agent who has experience with salvage titles.

Companies like GEICO, Progressive, and State Farm sometimes insure rebuilt vehicles, but their policies vary by state and case.

3. Get a Professional Appraisal

One of the biggest challenges with salvage vehicles is determining their value. A standard Kelley Blue Book valuation won’t apply. You should get a professional appraisal to establish the car’s current market value. This will help in two ways:

• It gives you and the insurer an agreed-upon value for the car.
• It supports your case for higher coverage limits if the car has been restored to excellent condition.

4. Choose the Right Type of Coverage

While you might not be able to get comprehensive or collision coverage for your salvage vehicle, you can still—and must—get liability insurance. Almost every state requires liability coverage to drive legally.

• Liability Insurance: Covers damage and injuries you cause to others. This is non-negotiable.
• Collision & Comprehensive: Some insurers may offer this, but often at a higher premium and with restrictions. You may only be able to insure the car for its actual cash value, which might be low.

5. Prepare for Higher Premiums and Limited Coverage

Let’s be real: insuring a salvage-title car will likely cost more. Because insurers see these vehicles as riskier, they charge higher premiums for less coverage. Don’t expect to pay the same as you would for a clean-title vehicle.

How Climate Change and Natural Disasters Are Affecting Salvage Vehicles

With hurricanes, floods, and wildfires becoming more frequent and severe, the number of flood-damaged and fire-damaged cars is rising. Many of these vehicles end up with salvage titles. While some are properly repaired, others are poorly restored and sold without full disclosure.

This makes it even more important to:

• Have the car thoroughly inspected by a mechanic you trust.
• Check the vehicle’s history report using services like Carfax or AutoCheck.
• Be extra cautious when buying a car from regions recently affected by natural disasters.

Economic Factors Making Salvage Vehicles More Popular

Inflation and ongoing semiconductor chip shortages have driven up the cost of new and used cars. More people are turning to salvage vehicles as an affordable alternative. This trend is likely to continue, making it essential for buyers to understand the insurance and regulatory landscape.

Final Tips for Success

• Always be honest with your insurer about the car’s history. Misrepresenting the title status can lead to denied claims or policy cancellation.
• Maintain detailed records of all repairs, parts, and inspections.
• Consider whether the savings from buying salvage are worth the potential headaches and higher insurance costs.

If you’re willing to put in the work, a salvage vehicle can be a great deal. Just make sure you go in with your eyes wide open—and covered.