Purchasing a vehicle with a rebuilt title can seem tempting thanks to the lower upfront cost. However, insuring a rebuilt title vehicle comes with some unique challenges. This article will explore the key steps for getting the right coverage at an affordable rate.
What is a rebuilt title?
A rebuilt title, also known as a “salvage title” or “reconstructed title” in some states, refers to a vehicle that was previously declared a total loss by an insurance company. This usually occurs when the repair costs exceed a certain percentage of the car’s pre-damage value, often 75–80%.
The vehicle is then rebuilt and repaired to a roadworthy condition in order to obtain a rebuilt title. Most states require rigorous inspections before issuing a new title. Vehicles with rebuilt titles tend to cost 20–40% less than comparable clean-title vehicles.
Understanding Rebuilt Title Classifications
There are a few common types of branded titles for rebuilt vehicles:
- Rebuilt/Reconstructed Title: Issued after substantial repairs to make the vehicle roadworthy again. This is the most common rebuilt title.
- Flood Title: Indicates previous flood damage. Extra scrutiny recommended before purchasing.
- Salvage Title: Not the same as a rebuilt title. Salvage title means the vehicle is damaged and needs repairs before it can be registered/driven.
Challenges of Insuring Rebuilt Vehicles
Insurers consider rebuilt title vehicles to be at higher risk and more likely to need repairs compared to clean title vehicles. As a result, insurance can be more expensive, and coverage options are more limited.
- Premiums can be up to 20% higher than for clean title vehicles
- Some insurers may only offer liability coverage, not full coverage with collision and comprehensive
- Additional inspections may be required by the insurer before issuing a policy
Major Insurers That Offer Rebuilt Title Coverage
Most major insurers like State Farm, Geico, Progressive, Allstate, and USAA provide rebuilt title insurance but have varying state-by-state requirements:
- State Farm: One of the best for rebuilt titles. Requires passing state inspection.
- Geico: Offers full coverage but requires extra inspections first.
- Progressive: Full coverage on select models. Lower rates than some competitors.
Smaller specialty insurers may also offer rebuilt title coverage.
Getting Insurance on a Rebuilt Title
Key steps to secure insurance for your rebuilt title vehicle:
- Obtain the rebuilt title certificate after repairs and inspections.
- Get a certified mechanic’s statement that the vehicle is roadworthy.
- Provide supporting documents requested by insurer such as repair records and photos.
- Compare quotes from multiple insurers to get the best rate.
Using Telematics to Lower Costs
One option to potentially reduce rebuilt title insurance costs is using a telematics program, also called usage-based insurance (UBI). These programs use a device installed in your vehicle to monitor your driving habits and offer policy discounts for safe driving.
While discounts may only apply to liability coverage, not collision/comprehensive, they can still lower your overall premium. Progressive’s Snapshot program is available in 49 states, for example.
Choosing the Right Coverage
The type of coverage needed depends on your state’s minimum liability requirements and your personal situation:
- At a minimum, purchase the state-required liability coverage
- Collision and comprehensive can protect against future damage, but may be limited or not offered at all on some rebuilt titles
- Analyze the value of your rebuilt vehicle vs potential repair costs when choosing coverage limits
Purchasing only liability coverage is generally the most affordable option. But also consider the risk of paying large out-of-pocket costs in an at-fault accident without collision/comprehensive coverage.
Filing Insurance Claims for Rebuilt Vehicles
The claims process can be more difficult with a rebuilt or salvage title vehicle. Insurers may require more proof to determine if damage is related to a new incident or if it stemmed from undiscovered pre-existing conditions.
Providing detailed repair records and maintenance history is crucial to help verify claims involving a rebuilt vehicle. Photographic evidence showing previous damage can also help establish a baseline.
Is a Rebuilt Title Vehicle Worth Insuring?
While rebuilt titles have some clear drawbacks like higher insurance rates, they can still be cost-effective if purchased and insured properly. Consider the following before buying a rebuilt vehicle:
- Inspect thoroughly for unrepaired damage before purchase
- Research the rebuilder’s reputation and quality of repairs
- Weigh the long-term costs vs upfront savings
- Compare insurance quotes from multiple providers
As long as you take the right precautions, insuring a rebuilt title can allow you to get back on the road while saving money compared to another used vehicle. Just be prepared for higher rates and more involved claims processes.
Let me know if you need any other details or have additional questions on insuring a rebuilt title vehicle! I’m happy to provide more information.