Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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In a nutshell...

  • Salvage cars are vehicles that have outlived their actual value or normal lifespan
  • Salvage cars are popular among used car buyers who want to save money
  • Such cars may qualify for liability coverage but other types of coverage may be hard to find

Some car owners who own a salvage vehicle may wonder if they can get insurance to cover their car.

Salvage cars differ from used cars because they have had an accident or mishaps that resulted in severe damage that caused the insurer to write it off as a loss.

This kind of car is often referred to as a “salvage title.” Enter your zip code above for FREE car insurance quotes today!

How does a car qualify to be a salvage vehicle?

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Salvage cars are cars that have been deemed a total loss by the insurance company but have been purchased and repaired by someone else.

The issue of insuring such a vehicle once restored is an important one since many people do this to save money on purchasing a car.

Salvage vehicles are considered fine to insure providing the car passes inspection. If the damage is severe, it may not pass inspection.

Here are flaws that may cause a car to not pass inspection:

  • Broken headlights
  • Windshield wipers not working
  • Turn signals broken
  • Other important mechanical functions are no longer working

If that is the case, you will have to get the car repaired before applying for insurance.

Liability will usually be offered to a salvage title that has passed inspection. However, collision or comprehensive coverage may not be an option in some cases.

Another limitation may be that you may only get 80 percent of the car’s original value when filing a claim.

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Types of Damages

One of the factors that influences how much coverage you may be eligible for with a salvage title is the type of damage that the car has experienced.

Some of the most common types of salvage car damages are:

  • Flood damage – Some salvage titles have been written off due to flood damage. Cars that are damaged by floods and water damage are often sent to salvage yards or junk car dealers to try to resell for a lower price.
  • Hail damage – Hail can cause severe damage to vehicles that cannot be repaired. It is usually primarily a cosmetic type of damage but can also involve windshield damage or body damage that goes beyond the surface.
  • Theft recovery – Cars that are reported stolen are often not located before the owner decides to purchase another car. In these cases, cars that have been located may be resold as salvage titles. Many cars that are stolen and later recovered are also missing parts.
  • Accident damage – The most common type of loss that results in a salvage vehicle is damaged due to an accident. When a vehicle is counted as a total loss or if the damage is greater than the value of the car, it is considered a salvage car.

Older cars are actually more likely to be stolen than newer vehicles.

Insurance companies will sometimes cover damages that are incurred after you obtain insurance for a salvage vehicle, but it may only be a part of the claim.

Liability for state minimums can often be obtained, but it is rare that you will be able to find full coverage for a salvage vehicle.

Beware of Junk Titles

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Beware of a title that you are considering that has been named “a junk title.”

Junk titles are vehicles that have previously been named as a salvage title, but they are so severely damaged that the state has prohibited them from being further repaired.

Carfax warns motorists about buying a salvage title to begin with. Not only are they difficult to insure, but they are often not safe on the road.

Flooded cars are never the same again, according to Carfax, and water damage can damage every part of a car due to mildew, rusting, and corrosion that naturally occurs after being immersed in water.

It is important that you check out any salvage or junk titles carefully and check whether or not it would be covered by your insurance provider before buying.

Some Sound Advice

We are an insurance consumer advice site, but we also feel a responsibility to do our due diligence to warn our drivers out there to use caution when driving or purchasing a salvage vehicle.

Just like auto insurance, you should not skimp on the important costs of purchasing and maintaining your vehicle so that you do not end up having to pay much more later on.

If the salvage title can pass inspection, you might be able to obtain some collision or comprehensive insurance, but this is not likely with a salvage title.

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How Insurance Companies View Salvage Vehicles

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Insurance companies would see salvaged cars as an increased risk if they obtained damage that was severe or that interferes with the ability of the car to function in normal conditions.

Investopedia.com has an article and a video that defines salvage value and how it is calculated. The video explains what is meant by depreciation and salvage value.

If you find a salvage vehicle that has been cared for and restored, you may be able to find insurance coverage that will work.

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