How to Insure a Rebuilt Titleby Scott Krohn
A salvage vehicle that has passed a state inspection and has been granted a rebuilt title presents a variety of unknowns to prospective insurance companies, including questions about safety and its fair market value. Due to these uncertainties, many insurance companies do not offer coverage at all, while others offer policies with limited coverage. As a result, you may need to work a little harder to get cost-effective insurance for a vehicle that has been rebuilt.
Get Quotes before Making a Purchase
Insurance companies tend to be more restrictive with their policies for rebuilt title cars, so start shopping before committing to purchase. If you have other cars that are already covered, call your current insurer to see if it offers policies for cars with rebuilt titles. Your insurer may know of other companies that offer policies for these vehicles as well, so ask for other options to expand your search. An additional benefit of getting price quotes early in the process is that they can be included in the determination of the true cost of owning the vehicle, which may help with price comparisons when several cars are being considered for purchase.
Gather the Required Documentation
The best way to disclose the history of your vehicle will be to provide as much information as possible to prospective insurance companies, starting with the paperwork that was required to apply for and pass the state inspection. Inspection-related documents vary between states, but typically include the rebuilt title and the repair estimate used by the previous insurance company to assess the extent and cost of repairing the vehicle prior to writing it off. Receipts for the repairs done prior to the inspection are another common requirement. Include the application for the inspection as well as the examiner's assessment in the documents you present to prospective insurance companies.
Get Additional Information in Order
Presenting additional documentation regarding repairs on the vehicle to prospective insurers may help to expand coverage or lower the premiums. Start with the estimates and receipts of any repairs that have been done since passing the inspection. Documentation of any work done after the inspection can provide additional assurance to the prospective insurance company that the car is safe to drive. Pictures of the damage, as well as photographic evidence of the subsequent repairs, can help to present a strong case about the quality of repairs and safety of the vehicle.
Check Proposed Policies for Limitations
Generally speaking, the biggest challenge related to insuring a rebuilt car is establishing a fair value for the vehicle. For this reason, the companies that provide insurance for rebuilt title vehicles normally offer only liability coverage. If an insurance company does offer collision coverage, check the policy for the way that claims are calculated, as the lower implied value of the vehicle may result in minimal payments. Under these circumstances, you'll need to determine whether the higher cost of collision coverage is still cost-effective as opposed to payments that may not cover the cost of repairs.
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