A vehicle is deemed a total loss when repair costs are significantly above the full cash value, ranging from seventy percent to ninety percent above value. These vehicles are referred to as salvage title cars. Obtaining salvage title insurance can be more complicated than standard insurance. However, knowing the steps needed to obtain the same can make the process much smoother.
How do Vehicles Become Salvage Title?
• Non-repairable vehicles
Severely damaged vehicles with no cash resell value are deemed ‘non-repairable,’ which means that they must not be repaired. The state usually allows such cars to be dismantled and sold for scrap or must be destroyed.
• Stolen cars
A vehicle reported stolen to the police and never recovered can become a salvage title. If the vehicle is found after an insurance payout has happened, the agent may sell it to a person who dismantles the car to sell the good parts. In these cases, the state may also deem it as salvage.
• Disaster-damaged vehicles
Vehicles damaged in natural disasters like floods may damage their electrical system because of being immersed in water for a lengthy period. While mechanics may be able to repair the automobile to look almost brand new, there can still be underlying technical issues. Some states consider these kinds of vehicles as salvage titles.
Tips to Insure a Salvage Title Car
Salvage vehicles are extremely difficult to insure due to the risk and uncertainty surrounding their reliability. Insurance companies are more reticent to take on the added risk of a salvage title. Here are some of the things you can do to increase your chances of getting insurance for these cars.
• Repair the vehicle
Most salvage title cars are marked as such after sustaining severe damage. Insurance companies will not insure a vehicle that is unsafe to drive. It must first be repaired if you want any chance of getting insurance.
• Obtain a rebuilt title
Vehicles with a salvage title are exceedingly challenging to sell. A salvage title can be changed to a rebuilt title after successful repairs but will still show on the title that it was once severely damaged. A vehicle with a rebuilt title can be legally used, registered, or sold.
• Compare prices
You may be asked to pay a significantly higher premium rate to insure a rebuilt title car than a clean title car. Make sure to compare quotes from two or more agents before deciding on the best offer.
• Prepare documentation
Because of the additional risk involved in insuring vehicles with rebuilt titles, insurance companies will often request specific documentation. Some standard documentation that you should have ready before getting a quote include
– A mechanic’s statement certifying that the vehicle has been fully repaired and is now safe for usage.
– Before photographs showing evidence of the rebuilt car’s state before its repair. This document is to compare the ‘before’ and ‘after’ condition of the vehicle.
– A repair estimate proving that you repaired a badly damaged car, including receipts for all related expenses.
Salvage title cars offer a unique set of challenges when it comes to insurance. Knowing the steps and process to get the vehicle ready to be insured will help you know what to expect and how best to proceed. If you have any additional questions about home and auto insurance, contact the experts at Gant Insurance Agency in McKinney, Texas. We are ready to help you with all your coverage needs today.