Finding the right policy for a salvaged car requires some comparison shopping. Only a limited number of companies will write insurance policies for this type of vehicle, and each has different standards for pricing and coverage. When prospective insurers have been identified, turning over as much information about the car as possible may help to expand coverage options and reduce the price of the policy. Once you have a proposal in hand, the last step is to review the policy to make sure it provides the needed coverage at a fair price.
Find an Insurance Company
Starting the process of shopping for insurance before buying a salvage vehicle can provide information on pricing and available coverage, and give you a more accurate picture of the total cost of owning the car. For example, if the only insurance available costs three times as much as planned, the total cost of the car increases as well, which may impact your decision on whether or not to buy it. For the best chance of getting affordable coverage for a salvage car, start with a call to your present insurance company to check on their policies toward insuring salvaged cars. Larger insurers, which can spread their risks over broad pools of insured vehicles, may provide coverage as well.
Create a Paper Trail of Repairs for Prospective Insurers
Build a file of the damage as well as the repairs on the car to give insurers a detailed history of the work that has been done on the car since being designated with a salvage title. Start the file with the insurance company’s original repair estimate and receipts for the replacement parts and repairs that preceded the state inspection. Add all documentation related to the inspection, including the examiner’s evaluation of the vehicle. Continue the paper trail with estimates and receipts for repairs and improvements that have been implemented after the state inspection. This documentation can present the case to prospective insurance companies that you are continuing to rebuild the car beyond the standards set by the state, which can answer questions about the car’s overall condition and provide assistance with establishing a value for the vehicle.
Despite the provision of the documentation of repairs before and after the state inspection, most insurance companies still will have reservations regarding the valuation and safety of a rebuilt salvage vehicle. For this reason, the most common form of coverage is liability only. With this type of coverage, if you are found to be at fault in an accident, the insurance company will pay a claim for damage to the other party’s vehicle but you will have to cover your own repairs out of pocket. Liability insurance premiums can vary widely between carriers, so compare the cost of each policy, as well as deductibles and coverage amounts.
Collision or Comprehensive Coverage
Some insurance companies offer collision or comprehensive coverage on a case-by-case basis, but it will be difficult to obtain due to insurers’ reluctance to pay claims on a car that has been written off as a total loss. If you do find an insurance company that will write this type of policy, expect a higher premium than liability coverage. Additionally, many insurers pay claims that are reduced in proportion to the lower implied value of rebuilt salvage cars, with a result being that you may have to pay for a portion of repairs, or the total cost if the deductible is greater than the claim. In this situation, you’ll be paying higher premiums for a policy that works like liability coverage, so you’ll need to assess whether paying for the car in full and going with a less expensive liability policy will be more cost-effective option.
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