Can You Get Full Coverage for a Car with a Salvage Title

Cars with salvage titles bring with them a lot of special regulations and issues. If a car has a salvage title, it means that something in that vehicle's history occurred that was significant enough that the state declared it a loss of some kind. In most cases, this means the car was in a serious accident. But in some states, stolen vehicles can be qualified as salvage vehicles. In fact, it can be pretty difficult to figure out the condition, value and quality of many (if not most) salvage vehicles.

If you're thinking of purchasing a salvage vehicle, remember that you're going to have to get auto insurance for it. And it's wise to think about getting full coverage, rather than minimum-standard insurance. There are some factors you need to be aware of, however.

• Car's value will affect insurance: Most salvage vehicles have a value of approximately 40 percent less than similar (non-salvage) cars. This means your car insurance coverage will take into account the reduced value, so you might not be eligible for a comprehensive policy. Why would your insurance company offer $10,000 in coverage for a car that's only worth $6,000?
• You'll pay more to insure this car: You know that your salvage vehicle has a history. Something happened. As a result, your insurance company is going to presume that your car is at slightly higher risk on the road. Maybe there's a mechanical or safety issue. No matter what, you'll be paying statistically higher car insurance rates (most likely) than you would for a non-salvage vehicle of similar age and condition.
• You'll get some coverage, but not all: Every state has its own laws that regulate salvage vehicles as well as insurance, so remember that your state's regulations could vary. But in theory, you should be eligible for liability coverage, medical coverage and uninsured motorist coverage for your salvage vehicle. You probably won't have any coverage available for physical damage to the car, and buying collision coverage might not be worth the investment (because, after all, the car's not worth a ton with a salvage title).
• Inspection, inspection, inspection: Before you buy a car with a salvage title, have it inspected by an independent mechanic. And when you go to get insurance for that car, don't be surprised if the insurance company will want it inspected, too. The company needs to make sure it's insuring a car that's safe to drive on public roads.