Will My Insurance Cover a Car With a Rebuilt Title?
One way of keeping the cost of a vehicle purchase to a minimum is to buy one at an auction. In many cases, you will be buying a vehicle that has been rebuilt after extensive damage, which should be indicated by the vehicle's title. Depending on the state you live in and the rules of insurance companies in your area, it could be a challenge to obtain insurance for the vehicle.
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Identification
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A vehicle with a rebuilt title, also known as a salvage title, is one that was deemed a total loss at one point and then reconstructed to be driven on the road. The vehicle may have been damaged in an accident or fire or experienced extensive water damage in a flood. Each state has different laws as to the suitability of rebuilt vehicles, and insurance companies have their own individual requirements.
Physical Damage Coverage
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Companies that insure rebuilt vehicles may only provide limited coverage. Because of the vehicle's questionable past and the uncertainty regarding its current condition, you may not be able to get physical damage coverage. Physical damage includes comprehensive and collision, which pay for repairs or replacement of your own vehicle if it is damaged or stolen. Even if the company offers physical damage coverage, you'll probably receive an amount far less than if you owned a comparable model without a rebuilt title, although your premium should also be lower.
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Liability Protection
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You may be able to find a company that will at least offer you liability coverage. While you will not be covered for damage to your own vehicle, you will receive protection if you cause an accident. Liability pays for property damage and injuries incurred by the driver and passengers in the other vehicle if you are at fault in an accident. It also pays for some legal costs in the event you are sued.
Finding Coverage
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If you want to insure a rebuilt vehicle, the best place to start could be your current insurance carrier. Even if the company has rules and limitations for insuring rebuilt vehicles, they may bend the rules for you if you've been a long-term customer and have filed few claims. The company may request that you allow a claims adjuster or other representative to inspect the vehicle before a final decision is made.
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References
- Photo Credit car wreck covered in graffiti image by 20/21 from Fotolia.com
