Scrap cars can be harder to insure, but you can still — and should — get the right insurance policy.
In short, yes: you can insure a car with salvage rights. But don’t expect a hearty meal. Most insurance companies offer salvage title liability insurance. This makes sense – assuming your car passes the necessary checks for registration, you’re not more likely to hit someone just because your car has a salvage right. Your likelihood of causing damage has not increased, so your liability for property damage and bodily injury should be the same as in an untitled car.
However, liability may or may not be the finish line, depending on your state, your insurance company, and the physical condition of your ambulance. Many insurance companies offer collision coverage for rescue vehicles. The question is, do you want it? In the event of a collision, most insurance companies only pay 80% of the car’s calculated market value. This means that if you total up your scrapped cars, you only get 80% of the replacement cost.
Collision insurance premiums are unlikely to be higher for a rescue vehicle. Again, this makes sense. Repairing a scrapped car isn’t much more expensive than repairing an equally damaged car that hasn’t been scrapped, but for the same insurance premium, you get less. Is it worth it? The choice is yours.
Lastly, most insurance companies do not offer comprehensive coverage for salvage cars. This type of coverage covers any repairs (after the deductible is hit), so it functions almost like a warranty (minus the pesky deductible stuff). Since most agencies will loan you a car that requires comprehensive insurance, your inability to get this type of insurance to salvage a title car may mean you will have to pay cash.
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Original release date: June 15, 2011
Frequently Asked Questions about Insurance Assistance Vehicles
Is salvage title more expensive to insure?
Vehicles with salvage titles may cost more for insurance; it depends on your insurance company and the kind of coverage you can get. Most rescue vehicles (or their drivers, really) are only covered by liability insurance. However, in some states, they can also get collision insurance.
Does Salvage Title Affect Your Insurance?
Salvage ownership shouldn’t affect your ability to get insurance, but it will affect the type of insurance policy you’re able to buy. Liability insurance should be fine. However, the choice of collision insurance is different.
Can a rescue vehicle be destroyed again?
A rescue vehicle could be destroyed again. However, if it’s the full amount, your insurance company may pay you far less than its full value.
Can the right to salvage be lifted?
Yes, and in most states, it needs to be cleared. Most states don’t consider cars with repossessed titles to be safe or fit to drive, which means you can’t put them on the road. You guys need to make repairs and pass state inspections to get out of salvage ownership. However, even if this happens, it’s still possible for you to carry the “rebuilt” or “salvage” designation for the remaining years of the vehicle you own.
Is buying a junk car a bad idea?
There are pros and cons to salvaging vehicles. They can usually be purchased at a very low cost, but you have to spend money to repair the vehicle to make it safe and compliant with state standards.