Can You Insure a Salvaged Car?

Walking through the salvage yard, you spot a magnificent piece of machinery. You know that with just a little elbow grease, you can get it back to its once pristine condition. The only question is: how do you insure a salvaged car? Like with anything, there’s always risk involved. Auto insurance agents may be a little hesitant to insure a vehicle with a sketchy road history, even if you’ve proven to be a spot-on motorist. Keep the following in mind when you are considering insuring a salvaged car.

What is a Salvaged Car?

A salvaged car as defined in the U.S. is a vehicle that has an accident history. This accident history is characterized by the vehicle’s labeling by an insurance agency as being damaged or totaled in its last insurance claim.

Oftentimes, a car might be deemed a salvage vehicle just because the cost of repairing it exceeds the actual worth of the car at the time. In other words, it’s still a great car in relatively decent condition, but the insurance adjustor said it was too expensive to repair.

To insure a salvaged vehicle, the auto’s owner must bring it “back to life” in the legal realm. When the vehicle has been declared salvaged, its information is stored in a database accessible to insurance companies. So whether or not you list the car as having been salvaged, your insurance company will still know its history. As the new owner or existing owner, if you have repaired the vehicle, you can receive a rebuilt title from the state. This will reinstate the vehicle as a “safe” restored vehicle.

Keep in mind that the laws are always changing regarding salvage vehicles, so it is best to get an auto insurance quotes comparison with comparison sites like CoverHound in order to verify just what the reality of getting insurance to cover the vehicle is.


Depending on the specific nature of the salvage, an insurance company might be more willing to not only insure the vehicle, but to treat it as a normal vehicle altogether. If the vehicle was only salvaged for being in a flood for example, then the major problem would be to inspect the parts for rust and corrosion and then redo the interior. After that, the car could be considered fine.

That being said, the disclosure could come back to show that maybe something else happened. If the car was in a horrific accident, or if it suffered a significant fall off of a cliff for example, it could wind up not only having potential problems that you are unaware of, but even the frame itself and some of the interior joints or pieces could be at risk of falling apart. In other words, just because the insurance company might be alright with insuring the vehicle in certain circumstances, it might also be that they don’t want to pick up any additional risk that could still be hidden within the auto that could spring forth at any point, even as you’re just cruising along the road. And, even if the insurance company does agree to insure your salvaged vehicle, they could charge a much higher rate and premium in order to cover what is essentially a risk-laden vehicle.

The key to any contract is being sure that you know the specifics. While it might seem like a simple concept to deal with, the fact of the matter is when you are dealing with legal contracts and the transfer of risk, you have to be aware of what you are actually doing, and what you are actually getting in return. Knowing the driving history of your vehicle will help you to find an insurer who understands you (and your vehicle’s) needs.

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Richard is a full time professional, husband, father and blogger juggling all the responsibilities of life and running a blog. Richard enjoys writing about life and online money matters.

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