Auto insurance

Will PEMCO insure a vehicle with a 'salvage' or 'rebuilt' title?

Friday, January 17, 2020by  Jaime Layng

mechanic working on car Q. I'm considering buying a car with a "rebuilt" or "salvage" title. Will PEMCO insure it?

A. Yes, but there's much to consider.

While hunting for a bargain on used vehicles, I've come across some with wording on their titles such as "salvage" or "rebuilt." Customers often ask what that means and if those vehicles can be insured. While the short answer is yes, consider the following to make an informed decision about your purchase.

First, about those title notations. Often called "branding," notations are added to the title by the Department of Licensing to show prior damage to the car. At some point, the vehicle essentially was deemed a total loss, meaning it suffered damage that wouldn't have been economically feasible to repair. A newer car typically sustains heavy damage to be a total loss, while an older car could be "totaled" for something as minor as a scratched fender.

Are those cars safe to drive? The answer varies by vehicle and damage, so there's no simple response. In some states a "rebuilt" notation may indicate that a totaled vehicle was repaired and passed a subsequent inspection, but that's not always the case. For example, in Washington the vehicle merely needs to meet certain criteria unrelated to repairs to receive the "rebuilt" brand, so don't rely on that alone to help you decide if a vehicle is safe.

Not all sellers prominently advertise a vehicle's prior damage or title branding, but you can do research using services like AutoCheck or Carfax. It's also a good idea to have your mechanic inspect any used vehicle before you buy. That's especially true of vehicles with prior damage or branded titles.

So what does all of this mean for your insurance? Will PEMCO insure these cars? Yes, although we'll ask to see photos of the vehicle before we can provide Comprehensive or Collision coverage. Be aware that even a vehicle that appears to be fully repaired will have a reduced value if the title is branded, so expect to receive a lower settlement offer if the car sustains future damage, and expect less value if you try to sell it.

Because of that, make sure you get a good deal if you buy any vehicle with a branded title!

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Comments on this post

personPEMCO Insurance07/20/2018 02:58 PM
Jose -- We checked with our underwriting team on this. We would consider write a salvaged vehicle if we have proof that all repairs were made (such as receipts). If you request comp/collision on the vehicle, we would likely ask for photos too. As always, it would be a case-by-case decision.
personJose Rivera07/20/2018 07:16 AM
My car was damaged during a hail storm. No structural damage. The insurance company totaled the vehicle and I want to keep it. Can you provide insurance?

Thank You

personJaime Layng08/24/2015 10:34 AM
Thank you for your comment, Vipin! Although there is no flat reduction that applies to all cars, a good rule of thumb is to reduce the value by between 20% and 40% when compared to the same vehicle with a clean title.
personVipin Kuar08/22/2015 04:29 PM
We are currently looking at a used car right now that has a "rebuilt' on the title. The owner, who happens to be a car mechanic, fixed it up for himself about four years ago, and has used the car for the past four years. It is running fine.

You have answered all my questions already- and thanks for that. The only question is, what is an appropriate value for this car? How much should the price be reduced because the title says ' rebuilt'.?

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