Buying a car that was previously totaled in a car crash and declared a salvage then rebuilt might seem like a great deal. However, finding the right insurance coverage for your rebuilt car could be trickier than you imagine.
Car insurance options for salvage cars that have been rebuilt are typically more expensive, and not all auto insurance companies accept to cover these types of cars. Nevertheless, you still need to have valid insurance coverage to operate your car and be financially protected if you get into an accident.
This post discusses everything you need to know about totaled (rebuilt salvage cars) and insurance coverage. Read on to learn more.
What Is a Salvage Title?
Typically, a car is categorized as a salvage when it has been damaged so badly that the auto insurance company decides it is not worth repairing. The damage could be due to an accident, flooding, or any other disaster.
Most insurance companies deem a car as a total loss when the repairs needed to fix the vehicle cost more than the car’s actual value.
However, some car owners choose to rebuild their salvage cars themselves or hire a professional to do it for them. After the car has been repaired, it will need to be inspected by the Department of Motor Vehicles (DMV) to ensure it meets all the safety standards.
Once the DMV is satisfied, the car will be issued a rebuilt salvage title. This simply means that the car has been rebuilt after being totaled and is now roadworthy again.
However, it is essential to note that a rebuilt salvage title does not mean that the car is as good as new. In most cases, the car will be worth less than it was before the accident.
This is because the car now has a salvage title, which flags it as being previously damaged.
As such, you might have difficulty finding an auto insurance company willing to provide coverage for your rebuilt salvage car.
What Is a Rebuilt Title?
A rebuilt title is usually issued when a car that had a salvage title has been repaired and inspected by the DMV.
The car is now roadworthy again, but it is important to note that a rebuilt title does not mean that the car is as good as new.
Most insurance companies sell totaled vehicles to scrap yards for auto parts, but in some cases, the car ends up being repaired -either because the owner wanted to fix and keep the car or the insurance company sold it to a repair facility.
Once the car has been repaired, it has to pass a safety inspection, at which point the state may issue a rebuilt title for the car.
However, the car’s history as a salvage remains a part of its history which explains why some people usually use the terms rebuilt title and salvage title interchangeably to mean one thing.
Remember that not all totaled cars are eligible for a rebuilt title. If the car was so severely damaged that it is declared non-repairable, it cannot be issued with a rebuilt title.
An easy way to differentiate between a salvage title and a rebuilt title is to check the color of the title. Green means a clean title (the car hasn’t been totaled), blue means a salvage title, while orange depicts a rebuilt title.
Salvage and Rebuilt Car Insurance
Generally, you can’t insure a salvage car because it is not roadworthy. Unfortunately, even after the car has been repaired and passed safety inspection, you may still have difficulty finding an insurance company that is willing to provide coverage for your rebuilt salvage car.
This is because the car now has a rebuilt title, which flags it as previously damaged.
As such, insurers typically deem these cars as high-risk and charge higher premiums. In some cases, you might even be denied coverage altogether. Others may only offer liability coverage but not comprehensive or collision coverage.
So, if you are thinking about purchasing a car with a rebuilt title or repairing your totaled car, be sure to shop around for auto insurance quotes from several insurers before proceeding with your plan.
It is highly recommended you get the quotes before you agree to purchase the car, just in case you have trouble finding the right coverage at an affordable rate.
Take time to research the car’s history and get a thorough inspection report by an experienced mechanic before committing to buying the car.
Can I Buy Car Insurance with Pre-existing Damage?
While it may be possible to buy car insurance with pre-existing damage, you must notify the insurance company of the damage when you purchase the policy.
Not disclosing pre-existing damage to your car could result in your policy being voided, leaving you without coverage if you need to file a claim.
Additionally, your premiums may be higher because of the pre-existing damage, so it is crucial to compare rates from different insurers before buying a policy.
If you’re considering buying a car with a salvage or rebuilt title, be sure to do your research so that you know what to expect in terms of insurance coverage and costs.
Does Insurance Cover Pre-Existing Damage?
Disclosing pre-existing damage to your insurance company doesn’t mean that it will be covered. Typically, car insurance policies don’t cover pre-existing damages, but the insurance company can use it to decline your claim in the future if you don’t disclose it.
Pre-existing damage refers to any damage your car already had before you brought it to the insurance company for coverage. This may include previous damages that you failed to repair or the normal tear and wear that happens to your car.
Most insurance companies will decline to cover pre-existing damages because they don’t have the facts they need to make a sound determination on your claim, and they are not legally required to cover any damage that happened before you took out a policy with them.
If auto insurance companies covered pre-existing damages, their liability would increase quite a bit, and premiums would go up for everyone.
To be sure that your insurance policy doesn’t cover pre-existing damage, read the fine print on your contract carefully or ask your agent to explain it to you.
Filing a Claim with Pre-existing Damage
While there is no guarantee that your insurance company will cover pre-existing damage, you may still have some luck if you file a claim.
The insurance company will look at the details of your claim and make a decision based on their findings. If it is determined that the pre-existing damage is not related to the current damage, then your claim may be covered.
For example, if you hit a deer and your car has $1,000 in damage, but the insurance company finds that you had $500 in pre-existing damages, they may only cover $500 of the claim.
It’s important to note that insurance companies typically don’t proactively look for pre-existing damage when processing claims. So, if you don’t mention it, they may not find out about it until you try to file a claim.
At that point, the insurance company could deny your claim or only pay for a portion of the damages.
I Have Been in an Accident – Can I Add Collision Coverage?
If you have been in an accident and your car sustained damages, you may be wondering if you can add collision coverage to your insurance policy.
In most cases, it is not possible to add collision coverage after an accident has occurred. That’s because insurance companies use your claims history to determine your rates, and adding collision coverage after an accident will most likely result in a higher premium.
If you don’t have collision coverage and were at fault for the accident, you will be responsible for paying for the repairs to your car. The other driver’s insurance company should pay for the repairs if you were not at fault.
If you’re considering adding collision coverage to your insurance policy, it’s essential to weigh the pros and cons. On one hand, you will have peace of mind knowing that your car is covered in the event of an accident.
On the other hand, collision coverage can be expensive, so you’ll need to decide if the added protection is worth the cost.
Wrapping Up
If you have a car that has been in an accident, or if your car has a salvage or rebuilt title, it is vital to understand the different types of insurance coverage available to you.
Salvage and rebuilt title insurance can help protect you in the event that your car is damaged again. Talk to your insurance agent about what options are available to you.
