3+ years experience in insurance and personal finance editing
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
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Buying a car with a rebuilt title has advantages and disadvantages. A car with a rebuilt title often costs less than an average used car, which might be tempting amid rising car prices. That said, car insurance companies may offer limited coverage options when it comes time to insure your rebuilt vehicle.
You can still stay protected on the road while driving a vehicle with a rebuilt title. Here’s what you should know about how to insure a car with a rebuilt title, including some best practices for choosing coverage.
Quick Facts
Most car insurance companies sell some form of rebuilt title insurance.
The more damage a car previously sustained, the more it’ll cost to insure.
The process of insuring a car with a rebuilt title varies slightly from state to state.
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What’s a rebuilt title?
Every vehicle comes with a title, which is a legal document that establishes a given driver as the owner of that vehicle. If a vehicle sustains significant damage that qualifies it as a total loss, it has a “salvage title” to let any future buyers know about this damage. Rebuilding a salvage vehicle to a road-ready condition will earn the vehicle a “rebuilt title.”
A car must sustain serious damage to qualify as a salvage vehicle, though specifics vary by state. For example, the New York DMV marks a car as a salvage title car when damage equals 75% or more of the car’s retail value.[1] Causes of vehicle damage include car accidents, floods, natural disasters, and theft.
After repairs, salvage cars must pass inspection from the state’s DMV to reach “rebuilt” status. Because motor vehicles with a rebuilt title could have future mechanical issues related to their history, insurance companies may try to offset this risk by charging higher rates. Some companies might also hesitate to offer full-coverage insurance to drivers of rebuilt vehicles.[2]
Assess the risks of buying a car with a rebuilt title
Buying a car with a rebuilt title is often cheaper than buying a regular used car, though you’ll want to be thorough during the buying process to avoid future costs. Always ask lots of questions, especially if you’re buying the car from a third-party seller who didn’t oversee the car’s repairs.
Here are some questions to ask the seller:
How was the car damaged originally? Was there extensive damage?
What repairs were done? Who performed these repairs?
What parts of the car were replaced, and where were these parts sourced?
Is a maintenance history available for the vehicle?
Can you provide state inspection documentation and proof of title status?[3]
Carefully assess the risks before buying a car with a rebuilt title. The more damage a car has sustained, the more risk you take on. For instance, cars with major damage to their frames or electrical system could present safety risks down the road.
Important Information
Exercise caution with sellers who avoid questions, won’t offer a full vehicle history report, or use high-pressure sales tactics. It’s a good idea to visit the seller’s site beforehand and search for customer reviews or Federal Trade Commission complaints.
Do you need rebuilt title insurance?
All drivers must have their state’s required liability coverage in order to drive legally. Drivers of cars with rebuilt titles shouldn’t have an issue purchasing liability coverage — though insurers may not want to sell them full-coverage insurance. Full coverage includes collision and comprehensive coverage to protect your assets in an accident or noncollision incident.
Most insurance agents will advise you to buy more than your state’s minimum liability requirements. Drivers of cars with rebuilt titles should look for an insurer that will allow them to exceed liability minimums. Otherwise, you could end up with sizable out-of-pocket costs in the event of an accident.[4]
Drivers of cars with rebuilt titles could face higher premiums, so seeking out affordable options is key. Shop around and receive quotes from multiple insurance companies in order to find the best deal.
Pros and cons of rebuilt title insurance
You should weigh the pros and cons before purchasing a car with a rebuilt title. The most obvious benefit of buying a car with a rebuilt title is the lower cost to purchase a vehicle. Unfortunately, drivers of rebuilt vehicles might have a difficult time finding full-coverage insurance.
Consider the following advantages and disadvantages before purchasing a car with a rebuilt title:
Pros
Costs less to buy a vehicle with a rebuilt title than other used or new cars
Wider variety of available vehicles
Safe to drive after passing inspection
Cons
Potential difficulty finding coverage
Limited coverage options
May struggle to receive a car loan
How to get rebuilt title insurance
You’ll need to buy rebuilt title insurance in order to drive legally. The insurance-buying process is a bit more involved when insuring a car with a rebuilt title, but you can still find solid coverage at a reasonable rate by following these steps:
Find auto insurers. Search online for potential insurers. Take a closer look at customer reviews to see if others have bought rebuilt title insurance from these companies. Find companies that meet your needs and budget.
Determine your desired coverage. Check your state’s liability insurance requirements and decide how much liability coverage you want. You should also consider other insurance products, like comprehensive and collision insurance.
Compare companies. Narrow your search down to a small list of companies, then request quotes from each one. Most companies make it easy to receive quotes online, but you can also compare multiple quotes at once through online comparison tools. Choose the insurer that offers the best combination of coverage options and value.
Complete required inspections and paperwork. Check with your state’s DMV to figure out if you need to complete any more inspections in order to qualify for your policy. Your insurance company may ask for your car’s maintenance history.
What factors affect rebuilt title insurance premiums?
Car insurance companies may charge you higher rates because they see rebuilt vehicles as more likely to need repairs than other vehicles. But that isn’t the only factor that affects your rates.
The following factors may influence rate increases or decreases:
Vehicle condition and history: Insurers see a car with major damage to its frame or electrical system as a greater risk for future mechanical problems and will consider this risk when determining your rates.
Driving record: Drivers with traffic violations on their record, such asspeeding tickets, at-fault accidents, orDUIs, face higher rates. Insurance companies see these drivers as a higher risk for future claims and adjust rates accordingly.
Coverage requirements: Some states have higher minimums for liability coverage. If you buy more coverage, you’ll end up spending more.[5]
How to save money on rebuilt title insurance
You can take some extra steps to save on your rebuilt title insurance policy, including the following:
Shop around. Prices vary by each company within the highly saturated insurance market. Receiving quotes from multiple insurers makes it easier to find an affordable rate.
Only buy necessary coverage. The more coverage you buy, the higher premiums you’ll end up paying. Figure out just how much insurance you need and avoid costly optional coverages.
Maintain a good record. Your rates will typically increase following an at-fault accident, speeding ticket, or other traffic violation. Completing an approved defensive driving course can qualify you for discounts.
Buying a car is a big purchase you should take seriously — especially if you’re considering a vehicle with a rebuilt title. If you still have questions, the information below should help you navigate the process.
Should you buy rebuilt title insurance?
Drivers of cars with rebuilt titles need to buy car insurance that meets their state’s minimum car insurance guidelines. In most cases, rebuilt title insurance costs more than coverage for a typical used or new vehicle. Insurers may sometimes limit your coverage options to just liability insurance.
How much does rebuilt car insurance cost?
Rebuilt title insurance typically costs more than regular car insurance. Prices vary based on the car’s condition, your driving history, and the amount of auto insurance coverage you purchase. Comparing rates from multiple insurance companies is a great way to save.
What’s the difference between a rebuilt and salvage title?
A salvage vehicle is unsafe to drive due to extensive damage from an accident, theft, or a weather-related event. If a salvage vehicle undergoes repairs that return it to operating condition, it’ll earn a rebuilt title. You can legally sell or purchase a vehicle with a rebuilt title.
Do auto insurers sell rebuilt title insurance?
Most auto insurers sell rebuilt title insurance, but you may have to shop a bit more to find an affordable rate. Some insurers may not want to sell you full-coverage insurance. Progressive, State Farm, and American Family are a few insurance companies that sell rebuilt title insurance.
Can you change a rebuilt title to a clean title?
No. Vehicles with a clean title have never had a total loss. “Title washing” refers to changing a rebuilt title to a clean title and can lead to criminal charges. This practice misleads consumers into buying cars that appear “clean” but have sustained major damage in the past.[6]
Mark Steinbach is a writer based in Brooklyn, NY. In addition to his years of work as a copywriter, he is also a TV writer with a degree in English from Harvard University. When he isn't writing, he can be found playing tennis or doing crossword puzzles.
Edited byKatie PowersAuto and Life Insurance Editor
Katie PowersAuto and Life Insurance Editor
Licensed auto and home insurance agent
3+ years experience in insurance and personal finance editing
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
