Can you get full coverage on a rebuilt title? Generally, yes, you can. However, it comes with limitations. If you just bought a car with a rebuilt title instead of a clean title, it could be because it’s cheaper. Now, you need to know about getting full insurance coverage for the rebuilt car. In this post, I will answer that question, as well as explain the steps to getting insurance for a rebuilt title car.
What Does a Rebuilt Title Mean on a Car?
When you buy a car, it could have one of three titles:
- Clean (usually green)
- Rebuilt (often orange)
- Salvage (typically blue)
These titles are colored differently to help you identify them. A lot of people mix up salvage and rebuilt titles, but they are not the same.
A rebuilt title car is one that used to have salvage titles but has been repaired and declared roadworthy as passing state-specific inspections. On the other hand, salvage titles are for cars that have big problems like fires, floods, or crashes (and never get fixed). Note that even stolen vehicles that were written off by an insurance company may still be considered salvage.
The big difference between salvage and rebuilt titles, apart from their colors, is that rebuilt titles mean the car is safe to drive on public roads.
Every state has its own rules for giving a car a rebuilt title. In Texas, for example, the car has to pass all the state’s inspections, like safety and anti-theft checks, to get a rebuilt title.
Can You Get Full Coverage on a Rebuilt Title?
Yes, you can get full insurance for a rebuilt title car. Many insurance companies usually won’t give full coverage to salvage cars, but they might consider it for rebuilt salvage titles. However, it might not be a full coverage. That is not to say that they won’t. While you can get full coverage on a rebuilt title, the insurance companies may be hesitant. That is because premiums for key parts of full coverage policies depend on the actual cash value of a vehicle. Unfortunately, this value can be difficult to determine for a rebuilt car.
With rebuilt titles, the insurance usually covers liability, not the full deal. This means it won’t pay for any damage your car gets, just the costs for the other car if there is an accident.
Insurance companies are cautious about giving full coverage to cars with rebuilt titles. It is tricky for them to figure out the car’s true value. They cannot be sure if the damage happened during an accident or if it was there before. To avoid this problem, they usually stick to offering limited coverage.
Another reason an insurance company does not provide full coverage on a rebuilt car is because it could have safety problems. In other words, there might be issues the mechanic didn’t fix, making them risky to drive. This means there’s a higher chance of accidents and insurance claims.
Why Do Insurance Companies Avoid Salvage Cars?
Insurance companies usually steer clear of insuring cars with salvage titles because they are declared total losses due to serious damage. Moreover, fixing these cars can cost more than the car is currently worth. This percentage often falls between 60% and 90%, but in Texas, it’s 100%.
But insuring a car with a salvage title won’t help you because you cannot legally register or drive it on public roads.
Sometimes, insurance companies sell these cars to salvage yards or rebuilders. They might fix them up and turn them into cars with rebuilt titles.
Getting Full Coverage for a Car with a Rebuilt Title
Even if you cannot get full coverage on a rebuilt title car, you should still get some coverage. It is a must to have insurance if you want to drive legally. However, not all insurance companies will help, so you should do some research ahead of time.
Also, remember that some insurance companies could add an extra fee of up to 20%. Lastly, if the money you saved by getting a rebuilt title car is less than what you’re paying for insurance, it might not be the best choice for you.
Now that you understand the basics, here’s what you should do to get full coverage on a rebuilt title:
1. Ask a qualified mechanic for a written statement
First, ask a certified mechanic for a statement to prove the car is in great shape to the insurance company.
2. Share Images of Your Vehicle’s Prior Condition for Insurance Claims
Take plenty of photos and videos of your car for the insurance company. This way, they can see how your car looked before it was damaged. This helps prove that your car is still in good shape and works just like it did before.
3. Keep Your Car’s Initial Repair Estimate Ready
Finally, make sure you keep the first repair cost document for your car, which you usually receive when you buy it. This paper shows what was fixed or improved on your car. When you show this and the mechanic’s report to the insurance company, they can check that the car was really fixed.
Alternatively, some people choose to engage in title washing or laundering or turn a rebuilt title into a clean one. That way, they get full coverage on a rebuilt title car without the insurance company being aware of the original title certificate.
Should You Not Buy a Car with a Rebuilt Title?
Rebuilt cars are cheaper than most clean ones, so you may not have to decide between leasing or getting a loan. But, they usually do not perform as well as others.
Also, it’s tough to sell cars with rebuilt titles. Many dealerships won’t take them as trade-ins. Also, there are risks when buying rebuilt title cars. Older ones can have expensive issues because finding replacement parts is harder. This is why car insurance companies charge higher rates for rebuilt title cars.
Insurance Companies That Offer Full Coverage on Rebuilt Titles
- The General
- Liberty Mutual
- State Farm
If you currently have a salvage title, you cannot get full coverage insurance. So, you will have to obtain a rebuilt title after the vehicle has been repaired and inspected by your state.
Conclusion on Why You Can’t Get Full Coverage on a Rebuilt Title
Insurance companies usually provide the basic coverage for rebuilt title cars required by the state. However, they are cautious about offering full coverage for two main reasons:
- It’s difficult for the insurance company to determine the exact value of a car once it’s been rebuilt. This makes it challenging to provide coverage for collisions and other types of damage.
- Rebuilt cars may still have hidden damage that hasn’t been repaired. It’s often tricky to determine if this damage existed before or if it occurred during an accident.