Salvage and rebuilt title insurance in Texas: what you can insure

Salvage and rebuilt cars often sell for much less than the same car with a clean title. The catch is insurance: some companies will not cover them at all, and others limit what they will cover. This guide explains the difference between the two titles in Texas and what coverage you can expect.

What is a salvage title in Texas?

A salvage title means the car was damaged badly enough that repairs cost more than a set share of its value, or an insurance company paid a total-loss claim on it. Fire damage, theft recoveries and owner-retained total losses can also carry a salvage brand. According to the Texas Department of Motor Vehicles, a salvage vehicle must be rebuilt and inspected before it can be driven on a road again.

What is a rebuilt title?

A rebuilt title means a salvage car was repaired and passed the steps needed to go back on the road. In Texas the title carries a "Rebuilt Salvage" brand, so future buyers and insurance companies can see the car's history. TxDMV notes that rebuilt cars are worth substantially less than the same car with a clean title, and that they are often turned down for insurance, so it suggests checking with an agent before you buy. See the TxDMV rebuilt title page.

Can you insure a salvage title car in Texas?

Not for driving. Because a salvage car cannot legally be driven on Texas roads, there is usually no auto policy that covers driving it until it has been rebuilt and retitled. If you are buying one to fix, plan to tow or trailer it, and get a policy in place as soon as it has a rebuilt title.

Can you insure a rebuilt title car?

Yes. Once the car is retitled as rebuilt, it can be registered and insured like other cars. What you can get depends on the insurance company:

• Liability: usually available, and it covers what Texas law requires (the Texas minimum is 30/60/25).
• Comprehensive and collision: some companies offer them, some limit them and some decline. Some may want photos or an inspection first.
• Claim payouts: if a rebuilt car is totaled again, payouts are based on its actual cash value, which is usually lower than for a clean-title car.

Tips before you buy a salvage or rebuilt car

• Get a vehicle history report and ask exactly what was damaged and repaired.
• Have an independent mechanic check the frame and safety systems.
• Get an insurance quote before you buy, not after.
• Keep receipts and photos of the repairs. They can help when you insure the car.

How A-MAX helps

Insurance companies treat rebuilt titles very differently, so the first quote you get is not always your only option. A-MAX shops multiple carriers to find the ones that will insure your rebuilt car, so you can choose. Get a quote online, call 1-800-921-AMAX or visit an A-MAX office. Se habla español.