All You Need to Know About Rebuilt Title Insurance

Fran
Lucy Lazarony
March 1, 2021

A salvaged title belongs to a car that’s been deemed a total loss.

Once a salvaged title is rebuilt and passes all requirements, it can be registered. Once the car is registered, you can buy rebuilt title insurance and drive the car. And you can always sell a rebuilt title, too. Your state’s transportation agency will determine if your car is eligible for registration as a rebuilt title. A salvaged title is different from a clean title, which is a title for a car that’s not been totaled. Insurance companies often sell salvage titles by auction. The buyers are rebuilders and sellers of parts. A title’s color indicates which type of title it is. Green, blue or orange for clean, salvage and rebuilt titles. There are branded titles too, which warn the buyer that the car has had significant damage in the past. Each state has different requirements for a rebuilt title. So reach out to your state for more information about qualifying for a rebuilt title.

Is it Easy to Buy Rebuilt Tire Insurance?

Some insurers will sell liability coverage as rebuilt title insurance. Getting full coverage rebuilt title insurance can be challenging. In addition, it is hard to tell which damages to reimburse on a rebuilt title. So Insurance may only be purchased in the form of liability coverage. It’s also hard to assign an accurate value to a rebuilt title. The fact that these cars are often stolen too, accounts for hesitancy to write rebuilt title insurance. A rebuilt title may be as much as 40 percent less valuable, according to Kelley Blue Book.

Another reason it’s hard to get full coverage on rebuilt title insurance is because sometimes the cars are not restored to a safe condition and may cause accidents.

What’s the Best Way to Get Rebuilt Title Insurance?

Because it’s a challenge to find an insurer to cover you with rebuilt title insurance at a good price, it’s a good idea to shop around with SmartFinancial, which will scour over 200 insurance companies to find you the best rate. You’ll need to have a few things to buy rebuilt title insurance. A certified mechanic’s statement that attests to the fact that your car is in good condition is necessary for buying rebuilt title insurance. So start shopping for a mechanic.

You may consider getting the car appraised for rebuilt title insurance, especially if you’re trying to get full coverage. You’ll have to submit photos of your car to be eligible for rebuilt title insurance. So take lots from every angle. Do not photoshop or use filters. Get a hold of the rebuilder or insurance company that declared your car a total loss. You’ll need original repair estimates. You can then show paperwork for the work you did. And you’ll need to provide the right VIN for the vehicle.

What’s Considered a Totaled Car?

If your car’s repairs exceed 50 percent of the car’s value, it’s considered a total loss. You can’t buy insurance for a totaled car. Once it’s totaled your policy will no longer cover it. Rebuilt title insurance is your only option. If you’re willing to repair the car, it will be costly and insurance will not cover any of it.

Which Insurers Offer Rebuilt Title Insurance?

Several car insurance companies offer rebuilt title insurance. Some only offer liability insurance coverage for rebuilt title insurance. Insurers like Geico and Progressive offer full coverage on rebuilt title insurance.

Here is a list of other insurance providers offering rebuilt title insurance:

  • 21st Century
  • Allstate
  • The Hartford
  • Infinity Insurance
  • Omni
  • General Insurance
  • Everest
  • Safeco
  • State Farm
  • Root Insurance
  • Insurance Navy

And there are some insurance companies that don’t offer rebuilt title insurance. They include Direct General, Esurance and Travelers.

What Can You Do with a Salvage Title?

Salvage titles are for cars that are totaled and are not road-worthy. You have to repair the car and get rebuilt title insurance to make the car legal to drive. Or you can sell the car for parts or get rid of it. Note that in some states, like New Jersey, rebuilt autos are often called salvaged cars, so make sure you understand the condition of a car before you buy. You can pay a trustworthy mechanic a couple of hundred dollars to look it over to see if it’s worth rebuilding to make it street legal or if it may be already.

Should I Not Buy a Rebuilt Title?

A rebuilt title auto costs less than you would pay for a new car or a used car with a clean title. So a cheap affordable price is an advantage.

But you’ll also need to pay for insurance and that tends to be higher than it would be for a car with a clean title. And not all insurance companies offer rebuilt title insurance. It’s also hard to get a loan without having full coverage insurance. And some insurers won’t offer full coverage for rebuilt title insurance. But it’s a bad idea to take out a loan on a rebuilt title, which should be cheaper than most used cars.

You’ll need to pay for a certified mechanic to look at the car. What kind of shape is the car in? Does the car just have body damage but the engine is fine? Or maybe the engine got damaged but the body of the car is fine? A certified mechanic who has worked on rebuilt title cars before will be able to tell you. The cost for this inspection may feel like a disadvantage but it is worth the price.

Another disadvantage to a car with a rebuilt title is you may have trouble selling it again once you buy it. Most car dealerships won’t take cars with rebuilt titles. You may have to sell it for a very low price to a private seller if you can find one.

Steps to Buying a Rebuilt Title and Rebuilt Title Insurance

Let’s begin with a few important questions to ask. How was the car damaged when it was first totaled? What has been repaired on the car? Has a certified mechanic looked at the car? Can you see the mechanic’s inspection statement? It is a good idea to have a car with a rebuilt title inspected by a mechanic with experience handling vehicles with rebuilt titles. Have this inspection done before you buy the car. You’ll also need to get the car inspected by the state. Does the car need additional repairs or is it ready for the road? A state inspection will tell you if you’ll be able to drive away with a car with a rebuilt title. Ask for documentation for the original and any subsequent repairs after the car was totaled. You want to know precisely what was wrong with the car and what got fixed and how. You also can learn about a car’s history by contacting the DMV.

Got a cheap car with a rebuilt to insure? Opt for liability insurance. There may be difficulty buying full coverage but the rule of thumb is you don’t need collision coverage if the car is valued at $4,000 or less. So liability only coverage may be best. You’ll want to review a couple of reports. Get an accident report and get a discloser report from the DMV. These reports can give you more information on a car with a rebuilt title. Avoid cars that have withstood extensive water damage and those with a bent chassis because they are very expensive to repair if they can be repaired. Water can badly damage important components by causing corrosion and other issues.

How Much Does Rebuilt Title Insurance Cost?

Premiums will vary from car to car and from insurer to insurer but rebuilt title insurance is more costly than a standard auto insurance policy with some insurance companies adding a surcharge of up to 20 percent. We suggest you compare dozens of insurers at once with SmartFinancial Insurance.

Are Classic Cars Rebuilt Titles?

Some classic cars are rebuilt titles and others aren’t. Classic cars may carry rebuilt titles because the owners rebuild and restore the cars to like new conditions. Classic cars with rebuilt titles tend to hold their value better than other cars with rebuilt titles. So that is one advantage of rebuilding a classic car. We hope this information helps you. If you have a rebuilt title and need rebuilt title insurance, begin your search by entering your zip code below.

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