Does A Rebuilt Title Impact Your Auto Insurance Costs?

When a vehicle is deemed a total loss after an accident or significant damage, it can sometimes be repaired and rebranded with a rebuilt title. While these cars often come at a lower purchase price, many buyers overlook the impact this designation has on insurance costs.

After working in the auto insurance industry for 9 years, I’ve seen firsthand how insurers approach rebuilt title vehicles and it’s not always straightforward. Some companies refuse to cover them, while others charge higher premiums due to increased risk. Understanding these cost differences is crucial, whether you’re considering buying a rebuilt car or already own one.

A driver cannot purchase auto insurance with a salvaged title, however, if one repairs their vehicle and makes it drivable, they are able to register it under a rebuilt status. This enables the driver to obtain auto insurance. However, insurance companies often view these vehicles as higher-risk because of potential hidden damage and uncertain long-term reliability. As a result:

• Some insurers refuse to cover rebuilt title vehicles altogether.
• Others may only offer liability coverage, excluding comprehensive and collision.
• Those that do provide full coverage often charge higher premiums due to the increased risk.

What Is A Rebuilt Title?

A rebuilt title is issued to a vehicle that was previously declared a total loss, but has since been repaired and deemed roadworthy by state authorities. This designation is crucial for buyers because it affects vehicle value, resale potential, and insurance coverage.

The process of obtaining a rebuilt title varies by state, but it generally follows these steps:

1. Vehicle Declared a Total Loss – After a severe accident, flood, or other significant damage, the insurance company deems the car uneconomical to repair and issues a payout to the owner.
2. Salvage Title Issued – The state assigns the vehicle a salvage title, meaning it cannot legally be driven until repaired and inspected.
3. Repairs Completed – A buyer (or repair shop) purchases the salvage-title vehicle and restores it to working condition.
4. State Inspection & Application – The repaired vehicle must pass a state inspection to verify that it meets safety and roadworthiness standards.
5. Rebuilt Title Issued – Once the vehicle passes inspection and the necessary paperwork and fees are submitted, the state issues a rebuilt title, allowing the car to be legally driven again.

While a rebuilt title allows a car to return to the road, it comes with drawbacks:

• Lower Resale Value – Rebuilt cars typically sell for 20-40% less than similar vehicles with clean titles.
• Insurance Challenges – Some insurers refuse to cover rebuilt vehicles, while others charge higher premiums due to concerns about hidden damage.

Rebuilt Title Vs Salvage Title

While both salvage and rebuilt titles indicate that a car has suffered significant damage, they have key differences in terms of legality, insurability, and roadworthiness.

Insurance Implications Of A Rebuilt Title

Insuring a rebuilt title vehicle comes with challenges. While some insurance companies offer coverage, many limit their options or charge higher premiums due to the increased risk of hidden damage.

Most insurers classify rebuilt title vehicles as higher-risk, meaning coverage options are more limited:

• Liability-Only Coverage – Many insurance companies only offer state-minimum liability coverage, which covers damage you cause to others but not your own vehicle.
• Limited Comprehensive & Collision Coverage – Some insurers may offer full coverage, but at a higher cost due to the uncertainty of past repairs.
• Some Companies Refuse Coverage – Certain major insurers will not insure rebuilt title cars at all.

Insurance companies consider rebuilt title vehicles riskier because:

• Unknown Repair Quality – Even after an inspection, there may be structural weaknesses or electrical issues that could lead to future breakdowns.
• Higher Likelihood of Future Claims – Studies suggest that rebuilt cars are more prone to mechanical issues, making them costlier to insure.
• Difficulty in Assessing Value – Since rebuilt vehicles have lower resale value, it’s harder for insurers to determine fair payout amounts if the car is totaled again.

Factors Influencing Insurance Costs For Rebuilt Title Vehicles

While a rebuilt title vehicle is typically cheaper to buy, insurance rates may be higher than expected. Insurers consider several factors before offering coverage, including the quality of repairs, vehicle specifications, and the owner’s risk profile.

1. Quality & Extent of Repairs

Insurers assess whether the car was repaired professionally or by an uncertified mechanic.

• Vehicles repaired by certified mechanics are more likely to receive full coverage at lower rates.
• Poorly repaired vehicles may be denied coverage or have higher premiums due to the risk of hidden damage.
• Submitting detailed repair records and before-and-after photos can help lower costs.

2. Vehicle Make, Model & Year

Certain vehicles are more expensive to insure, even with a rebuilt title.

• Luxury & sports cars – Costlier to repair, leading to higher insurance rates.
• Older vehicles – May have corrosion or outdated safety features, making them harder to insure.
• Classic cars – Often require specialized insurance, which may be expensive.

3. Vehicle Safety Features & History

A car’s safety features directly impact insurability and premiums.

Insurers check whether airbags, anti-lock brakes, and electronic stability controls have been properly restored after an accident.
If safety features were not repaired or reset, the car may be deemed unsafe, making coverage more difficult to obtain.

4. Driver’s Record & Location

As with any vehicle, your personal driving history and location influence insurance costs.

• A clean driving record leads to lower premiums, while accidents and violations increase costs.
• If you live in a high-theft or high-accident area, expect higher insurance rates, even for a rebuilt vehicle.

There are additional ways that help a driver influence the cost of a rebuilt vehicle. A certified mechanic’s statement carries much weight as do photos of your automobile; these would be before and after repair. Other proof of repair such as the repair estimate and that payment has been made.

What Companies Cover Rebuilt Titles?

Insuring a vehicle with a rebuilt title can be challenging, as not all insurance companies offer coverage, and those that do may have specific limitations. It’s essential to contact insurers directly to understand their policies regarding rebuilt titles. Below is a list of companies known to provide coverage for rebuilt title vehicles:

Other top companies are:

American Family, The Hartford, 21st Century, Mercury, and The General. USAA also offers rebuilt insurance and would be number one, but you must be a military member to qualify for their benefits.

Keep in mind that just because a company offers Full Coverage does not mean your vehicle will qualify for Full Coverage.

Also, these numbers are not direct quotes. Your vehicle situation will determine your rate. Year, make, model and your personal information will ultimately determine your individual rate.

It is important to give each insurance company all the vehicle information when you obtain your quote. All accidents, repairs, and even your personal driving history. All of this will weigh in your quote.

An insurance company can deliver you a quote, but when you obtain your insurance, if they discover a fallacy, they can backdate the policy and charge you a higher rate. This can include any accidents, tickets, or liens.

Tips To Lower Insurance Costs For Rebuilt Title Vehicles

While rebuilt title cars typically cost more to insure, there are ways to reduce your premiums and find better coverage options. Here are some practical tips:

1. Maintain a Clean Driving Record

• Avoiding accidents and traffic violations can lower your rates over time.
• Some insurers offer safe driver discounts, which can help offset the increased cost of a rebuilt title.

2. Install Approved Anti-Theft & Safety Features

• Adding anti-theft systems, such as GPS tracking or alarm systems, can reduce your premiums by up to 15%.
• Some insurers require proof of installation before applying discounts.

3. Bundle Your Insurance Policies

• Combining auto insurance with home, renters, or life insurance can unlock multi-policy discounts of 5% to 25%.
• Not all insurers offer bundled discounts for rebuilt titles, so it’s important to check.

4. Opt for a Higher Deductible

Increasing your deductible from $500 to $1,000 can lower your premium by 10-20%.
Only choose this option if you have enough savings to cover the deductible in case of an accident.

5. Compare Quotes from Multiple Insurers

• Not all insurance companies cover rebuilt title vehicles, and rates vary widely.
• Shop around at least once a year to compare rates and look for insurers that specialize in high-risk vehicles.

Pros And Cons Of Insuring A Rebuilt Title Vehicle

A rebuilt title vehicle can be an attractive option due to its lower price, but it comes with insurance challenges. Below are the key pros and cons to consider when insuring one:

Pros of insuring a rebuilt title vehicle

Cons of insuring a rebuilt title vehicle