Salvage: Auto Insurance Explained [2024]

What does salvage mean for a car? By definition, a salvage title is a vehicle that has been deemed a total loss because it has sustained significant damage.

The types of damage that result in a salvage title may include damage from a flood, hail, vandalism, theft, and unrepairable damage most likely resulting from a collision.

Because a salvage title stems from a vehicle being totaled, you will most likely be unable to drive or insure a salvaged vehicle. However, you can still find auto insurance for a salvage title if certain requirements are met.

If you’re looking for car insurance for salvage or rebuilt titles, type your ZIP code in the free tool above and find quotes in your area.

What does salvage mean?

A salvage title is a label given to a vehicle by a state DMV after a car insurance company has deemed it a total loss.

The vehicle is typically totaled by the car insurance company because it has sustained damage from an accident, flood, hail, theft, or vandalism. The damage is so severe that it is either unrepairable or the repairs cost more than the value of the car.

Read more: Top Salvage Title Auto Insurance Provider

Types of Salvage Damage

Accidents: Accidents are the primary reason a vehicle can become salvaged. A severe accident can result in damage that is either unrepairable or too costly to repair.

Flood damage: This type of damage primarily occurs due to extreme water damage. Flood damage isn’t usually the result of something such as a flash flood. This damage occurs from catastrophic damage such as with hurricanes.

A flooded vehicle is one that has been completely or partially submerged in water to the extent that its body, engine, transmission, or other mechanical component parts have been damaged

Water damage can be quite harsh to vehicles. Water can ruin electronics, lubricants, and mechanical systems. The damage may take a while to seep through and can be quite harmful if not repaired right away.

Although flood insurance and hurricane insurance are options with your car insurance or home insurance coverage, extreme damage may mitigate your coverage.

The Insurance Information Institue explains how to avoid purchasing a vehicle that is non-operational from a flood.

Hail damage: There are four types of hail damage:

• Cosmetic Damage with Intact Paint
• Cosmetic Damage with Scratched Paint
• Severe Damage with Intact Paint
• Severe Damage with Scratches

The two types that may result in a salvage title are severe damage with intact paint or with scratches. Hail damage often means dents or cracked windows to a vehicle. This severe damage may be costly to repair, hence the salvage title.

A salvage vehicle with hail damage is one of the easier types of damages to repair and re-insure.

Theft: A salvage title may be granted when the stolen vehicle is found, but severe vandalism and missing parts — such as missing all four tires and wheels and smashed windows — again leave the car costing more to repair than it’s worth.

Vandalism: This type of damage occurs if the car has been spray-painted, overturned, or vandalized enough to cause severe damage.

Non-repairable: Non-repairable damage can take place when a vehicle has no resale value outside of its parts. Along with a salvage title, this type of damage can also be referred to as a junk title.

If the damage is bad enough, some states won’t allow a vehicle to be salvaged. It must be sold as scrap or destroyed. There is no chance for repair.

Is a salvage title bad?

Although a salvage vehicle can’t be driven, it’s not the end of the world. Depending on the damage, a salvage vehicle can be repaired.

It’s important to remember that a salvage title only means the car insurance company won’t cover the cost of repair because it exceeds the value of the car. It doesn’t mean that the car is non-repairable.

Can you drive a car with a salvage title? Any vehicle that is intended for driving must be insured. You may not be able to find insurance for a salvage vehicle, so you can’t legally drive it.

A car with a salvage title must pass all the requirements by the state and receive a rebuilt title if you intend to drive it. Car insurance companies will take this information and typically extend a liability coverage option.

Other car insurance coverage such as comprehensive, collision, or even full coverage may be harder to receive due to the previous nature of the vehicle being salvaged.

I just found out my car has a salvage title, what do I do?

If you discover your vehicle has a salvage title, you have a few options.

• Option 1: Keep the salvage vehicle
• Option 2: Repair the salvage vehicle
• Option 3: Sell the salvage vehicle

If you keep your salvage vehicle and have no plans to repair it, there is not much you can do with the vehicle legally. It  won’t be insurable and doesn’t meet the requirements to be driven on the road.

If you plan to repair your salvage vehicle, you will assume all the costs of repair with no help from your car insurance provider. After the repairs, you can check with your state’s criteria for a rebuild salvage title. When you receive that new title, the car can be driven and potentially insured.

Your last option is to sell your salvage vehicle as is or for its usable parts. The vehicle can be sold to a salvager or a junkyard where it will be scrapped.

You can find car insurance for a car with a salvage or rebuilt title near you by entering your ZIP code in the free tool below.