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Insuring a rebuilt title car

Fact-checked with HomeInsurance.com

Purchasing a new car is a significant expense for most people. One way to save money on the purchase is by buying a rebuilt title car, which are usually sold at a lower cost than cars with clean titles.

If a car has a rebuilt title, that car was at one time totaled. At some point after being declared a total loss, the car was rebuilt and passed inspection. Once the car is road-worthy again, it’s considered rebuilt and issued a rebuilt title.

Buying a rebuilt car understandably comes with risks. Because auto insurance companies take on that risk when insuring the car, it might take some time to find an insurer that is willing to do so. 

What is a rebuilt title car?

A car’s title is a legal document that provides important information about the car, such as Vehicle Identification Number (VIN), ownership, state where the car is owned and vehicle history. 

A car can have different kinds of titles depending on its history, and a car can have different titles at different points in its life. There are  several types of car titles. Here are a few pertinent examples:

  • Clean title: Cars start out with a clean title. This title means the car has never been declared a “total loss” after an accident. A clean title does not mean that a car has never been in an accident. This kind of title indicates the car has never been totaled as a result of an accident.
  • Salvage title: After a car incurs major damage, it could be issued a salvage title. Auto insurers who pay claims are usually the ones who issue a salvage title and mark the car as a total loss, meaning the cost to fix the car is greater than the car’s worth.
  • Rebuilt/Reconstructed Title: A reconstructed, or rebuilt, title means the car has been fixed to the point where it can be legally driven again. Insurance companies, body shops, collision centers or licensed rebuilders can issue a rebuilt title. There may be further inspections required, depending on the state where the car is registered. 
  • Junk title: After a car is sold to a junkyard, it may receive a junk title. This kind of title means the car will be scrapped for parts or materials and is no longer legal to drive. A junk title is usually considered permanent and cannot be removed in most circumstances. 

Buying a rebuilt title car

When purchasing a car with a rebuilt title, the buyer will be aware that the car has been totaled in the past. However, there are different ways a car can be totaled. How much of a risk the rebuilt title car will be depends on how the car was totaled. 

After an accident, a car can be totaled for cosmetic reasons. There might be little to no damage to the interior of the vehicle, but due to cosmetic body damage that exceeds the cost of the car, insurers have chosen to total the car rather than repair the damage. 

Sometimes the damage to a car is far more than cosmetic. After a serious accident or an incident like flooding, a compromised motor and other operational damages can cause a car to be totaled. These damages affect a car’s road-worthiness much more than cosmetic damage does, so if the car was rebuilt after deep operational damage, the buyer is taking on a greater risk than if the car was only damaged cosmetically. 

Can I drive a car that has been totaled? 

Even after a car has had a salvage title, it can be driven legally. Before the car is allowed back on the road, it needs to pass inspection. The inspection process for cars with a salvage title differs from state to state. In most cases, a car that has been totaled will have to go through the same inspection process at the DMV as a car with a clean title. 

Can I insure a rebuilt title car? 

Auto insurance is mandatory in most states, and drivers must be insured independently of their car’s title status. If the rebuilt title car is going to make it back on the road legally, it will need to be insured under a policy.

Although it is mandatory for all drivers to have auto insurance, auto insurance companies are not required to insure every car and driver who’s looking for coverage. Many people decide to shop around for different auto insurers to get the best rate, but drivers who own rebuilt title cars may be forced to do so to find a company willing to insure the car.

Remember the basics

Regardless of the type of car, all drivers will need auto insurance. If the car has a rebuilt title, expect to call around to a few insurers before finding one that will provide coverage.

What coverage can I get for a rebuilt title car?

Auto insurance companies are usually hesitant about insuring cars with rebuilt titles. When a driver finds a company that is willing to insure the car, the insurance options offered by the company may be limited. 

Many auto insurers that offer insurance for rebuilt title cars may only offer liability coverage. Liability coverage is the minimum amount of insurance required in most states, and it only covers other people and property in the event of an accident, not the driver themselves.

An auto insurer might be more willing to insure a rebuilt title car with liability coverage, because if the car sustains damage, the company will not have to cover the repair. Liability coverage will only cover other people and cars if the insured vehicle is found to be at-fault in the accident. 

The takeaway

A rebuilt title car means that the car has been totaled and restored to driving condition. 

Buying a rebuilt title car is a great way to save money, but buyers should note that it may be difficult to find an insurer willing to provide coverage for the car. 

If a driver can find an insurer to cover their rebuilt title car, the insurer will probably only provide liability coverage, which is the minimum amount of coverage needed to drive legally in most states. 

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