Can a Salvage Car Be Insured in California?

If your car has suffered significant damage — whether from a severe accident, flooding, or a harsh hailstorm — it may end up in one of California’s salvage pools, auction houses, or scrap yards.

For example, a major rear-end collision could render the frame and body irreparable, while floodwaters might destroy the engine, electronics, and interior. Even a hailstorm can leave behind extensive dents and shattered windows, ultimately resulting in a salvage title.

If you’re thinking about restoring such a vehicle and getting it back on the road, you may be wondering: Can you insure a car with a salvage title in California? Keep reading to find out.

What Does a Salvage Title Mean in California?

The California Department of Motor Vehicles (DMV) issues a salvage title for vehicles that have sustained substantial damage or loss due to severe accidents, floods, vandalism, dismantling, or similar events.

Moreover, under California Vehicle Code (CVC) Section 544, a vehicle is classified as a salvage or "total loss" if it meets one of these criteria:

• The vehicle is deemed uneconomical to repair after being wrecked, destroyed, or damaged. Leasing companies, lenders, or insurers usually make this determination. If left unrepaired, it retains its salvage status.
• When an insurance company declares a car a total loss, the owner receives a payout. The insurer also reports the status to the California DMV, which assigns the vehicle a salvage title.

Why Would Anyone Consider Buying a Salvage Car?

The biggest advantage of buying a salvage title car in California is the low price. Due to damage, salvage cars are often sold for much less than their market value.

For Do-It-Yourselfers (DIYers), it can be a rewarding project to restore a vehicle, especially if they’re skilled at repairs. Many salvage cars are perfect for those who love fixing things.

Salvage vehicles also offer a goldmine of spare parts, ideal for car enthusiasts or mechanics. Additionally, there’s potential for profit. You can buy, fix, and sell salvage cars or part them out for valuable components.

Why Do Cars Get Salvage Titles?

There are several reasons why a car may have a salvage title. Here’s a breakdown of some of the most common scenarios:

• Total loss after accident: Cars with repair costs exceeding their value are considered totaled, often due to severe structural damage or expensive repairs.
• Natural disasters: Floods or hurricanes may cause hidden damage, leading to salvage titles. These issues may not be immediately visible or repairable.
• Theft and recovery: Stolen cars recovered after an insurance payout usually get salvage titles. They must undergo a thorough inspection before they’re roadworthy.
• Unrepaired damage: Vehicles sold without re-titling after significant damage may have safety issues that are not immediately visible, posing a risk to functionality.
• Voluntary salvaging: Car owners may request a salvage title when their vehicle is undergoing extensive repairs or rebuilds.
• Aftermarket modifications: Major modifications can make cars non-compliant with safety or insurance standards.
• Kit cars: Custom-built vehicles often require extensive inspections and may get salvage titles before being registered.
• Parts-only vehicles: Cars meant only for parts lack safety certifications and cannot be legally driven.
• Classic restorations: Antique vehicles often get salvage titles due to previous damage before undergoing restoration and reclassification.

​The Difference Between Salvage and Rebuilt Titles

When a car is so badly damaged that fixing it would cost more than its actual cash value (ACV), a salvage title is granted. ACV represents the car's value before it was damaged, taking into account factors like its condition, mileage, and current market demand.

However, some owners prefer to keep their salvage cars instead of turning them over to the insurance company. If you choose this route, you can repair the vehicle at your own expense and obtain a rebuilt title.

Without this, you cannot legally drive the car while it retains its salvage branding. A rebuilt title serves as proof that the car has been repaired, inspected, and deemed roadworthy.

Insuring Salvage Title Cars in California: Regulations

Below are some of the relevant laws and regulations that govern insurance for salvage title cars in California:

Minimum Auto Insurance Coverage

In California, as in almost all other states, driving without car insurance is illegal. CVC Section 16056 mandates that all drivers, including those operating rebuilt or revived vehicles with a salvage title, carry the state's minimum liability coverage.

They must show proof of insurance when requested by law enforcement, typically using an insurance card that includes the car insurance policy number, insurer details, and coverage dates.

Senate Bill 1107 has increased the minimum amounts of required liability coverage, effective January 1, 2025, which are:

• For injury or death of one person: $30,000
• For injury or death of multiple people: $60,000
• For property damage: $15,000

Failure to meet these insurance requirements can result in fines ranging from $100 to over $1,000, vehicle impoundment, and possible suspension of driving privileges for up to four years, especially for repeat offenders.

Notice of Salvage Vehicle Retention by Owner

Under CVC Section 11515(b), if the owner of a vehicle that has been declared a total loss decides to keep it, the insurance company must notify the California DMV using the Salvage Vehicle Notice of Retention by Owner.

The insurance company must also inform the owner that they should apply for a salvage certificate within 10 days after the insurance claim for the total loss/salvage vehicle has been settled. The owner must submit a signed certificate of ownership, the vehicle's license plates, and a $15 fee to the California DMV.

Once the California DMV receives these, it will issue a salvage certificate, which is needed to legally insure or register the vehicle. This certificate also helps with future evaluations, including repairs or rebuilding.

Steps To Insure a Salvage Title Car in California

So, can you insure a car with a salvage title in California? No, unless it is repaired, inspected, and reclassified as roadworthy.

The process can be challenging, with a lot of bodywork and paperwork. However, if you're dedicated to bringing the car back to life, it is definitely possible. Here’s how to do it:

Step 1: Repair Your Salvage Car

Repair any parts that can be fixed, and replace those that are beyond repair with new parts. Keep all receipts for parts purchased and any repair documentation, as you will need them later to prove the work done on your vehicle during the registration process.

Step 2: Register the Rebuilt and Restored Vehicle

After restoring your salvage car to working condition, you must register it again with the California DMV. To complete the registration procedure, take the following actions:

• Apply for a salvage certificate using the Application for Salvage Certificate or Nonrepairable Vehicle Certificate (Form REG 488C).
• Fill out the Application for Title or Registration (Form REG 343) and make sure that you, along with any other vehicle owners, sign the form.
• Submit one of the following documents as proof of ownership:
  • The vehicle title or an Application for Replacement or Transfer of Title (Form REG 227)
  • A Salvage Certificate or Application for Salvage Certificate (Form REG 488C)
  • A Vehicle/Vessel Transfer and Reassignment (Form REG 262) from a licensed dismantler
  • A Bill of Sale (Form REG 135)
• Complete a Statement of Facts (Form REG 256) to provide additional details about the vehicle's history.
• Submit a separate odometer disclosure if there is no space on the title to disclose the mileage.
• If the vehicle has any existing license plates, surrender them to the California DMV.
• Be ready to pay all the required fees, including:
  • Salvage certificate fee: $27
  • Prior history fee: $2
  • Total loss salvage/dismantled vehicle inspection fee: $50

Step 3: Get Your Revived Salvage Car Inspected

Your vehicle must undergo inspection to ensure it meets safety standards. Complete the following inspections:

California Highway Patrol Inspection

To get a referral for a California Highway Patrol (CHP) inspection, go to your local California DMV office. Once you have the referral, schedule the inspection with the CHP. If your vehicle passes, the CHP will issue a Verification of Vehicle (Form REG 31) or a CHP Certificate of Inspection.

Brake and Light Inspection

Bring your car to a state-licensed repair facility so that the lighting and braking systems can be examined. Obtain official certificates proving that these systems are working properly.

Smog Check

Depending on your vehicle's type, age, or condition, it may require a smog check. Visit a California DMV-authorized smog check station or the California Bureau of Automotive Repair (BAR), unless your vehicle is exempt from the smog requirement.

Step 4: Apply for a Rebuilt Title

After your vehicle passes all inspections, go to your local DMV office to apply for a rebuilt title. Bring all necessary documents, including inspection certificates, repair receipts, and proof of fee payments.

After your application is accepted by the DMV, you will be issued a rebuilt title that will enable you to legally drive, register, and obtain insurance for your car in California.

Step 5: Buy Insurance for Your Rebuilt Salvage Car

Once your salvage car is rebuilt, re-registered, and ready to hit the road, the following steps will guide you through securing insurance:

• Have a certified mechanic inspect your car and request a written statement confirming its safety and roadworthiness. Most insurers require this certificate before offering coverage.
• Shop for coverage with the best auto insurance companies. Start finding and contacting reputable insurance companies that may offer insurance for rebuilt salvage cars.
• Carefully review the coverage options, premiums, and terms offered by various insurers. Collect and compare quotes from different insurers to get the best deal. To obtain quotes, you’ll need to provide the car’s original repair estimate, along with photos and videos of the vehicle.

Common Challenges When Insuring a Salvage Car

These are typical challenges you may face when you insure a salvage title car in California:

Limited Coverage Options

Can you insure a car with a salvage title once it is rebuilt and passes a safety inspection? The answer is yes. Once the vehicle is restored and meets safety standards, liability insurance is typically available through many insurers. However, securing collision or comprehensive coverage can be more challenging.

Some insurers may refuse to offer certain types of car insurance policies because they cover repair costs after an at-fault accident or other incidents. The concern is that it can be challenging to distinguish between new damage and pre-existing damage from the incident that resulted in the salvage title when a claim is made.

Higher Insurance Premiums

Are rebuilt title vehicles more expensive to insure? Generally, insuring a rebuilt salvage car costs more than insuring a vehicle with a clean title. This is because salvage cars may have underlying issues from previous damage, increasing the risk of mechanical failures, accidents, and potential insurance claims.

Insurance rates vary based on factors such as location, coverage level, and driving history. However, vehicles with a salvage or rebuilt title often come with higher premiums due to their perceived risk.

To save on car insurance, consider opting for a higher deductible, taking advantage of discounts, or maintaining a clean driving record. Avoiding violations like driving under the influence (DUI) or reckless driving can also prevent further increases in your insurance rates.

Comparing quotes from multiple providers can help you find the best possible coverage at a reasonable price.

Lower Insurance Payouts

When insuring a salvage title vehicle, you may be able to obtain comprehensive or collision coverage, but the payout will likely be lower than for a car with a clean title. If the vehicle is declared a total loss again, the insurance payout may not be enough to replace it with a comparable vehicle.

Salvage title vehicles generally have a lower market value due to previous damage, extensive repairs, or lingering issues that could affect performance and safety.

Insurance companies factor in these risks, which is why payouts for comprehensive and collision claims are often significantly reduced. Additionally, insurers know that reselling a rebuilt salvage car or its parts is less profitable, further contributing to the lower compensation.

Now that you've learned about the challenges involved, you can better understand how a salvage title affects insurance.

Insurance for Salvage Title Car: FAQs

When you ask the question, "Can you insure a car with a salvage title?" there might be additional concerns on your mind. Let's provide clarity through the following FAQs:

Can You Drive Around With a Salvage Title?

No, you cannot legally drive a salvage title car in California. According to CVC Section 24002(a), driving an unsafe or improperly equipped vehicle is prohibited. Salvage cars are typically damaged or inoperable. To drive one, you must repair it, obtain a rebuilt title, register, and insure it after inspections.

Can You Register a Salvage Title Car in California?

Yes, you can register a salvage title car in California after restoring it to meet safety standards and obtain a rebuilt title. The process includes applying for a Salvage Certificate, completing Form REG 343, and passing CHP (California Highway Patrol) vehicle inspections.

How Much Does It Cost To Inspect and Restore a Salvage Title Car in California?

Repairing and restoring a salvage title car in California is influenced by factors like the type of damage, the car’s age and value, parts availability, and labor costs. Meanwhile, inspection fees typically total around $135, covering brake and light systems, CHP, and smog inspections.

Is It Worth It To Insure a Salvage Title Car?

Insuring a salvage title car can be challenging and costly. Many insurers offer only liability coverage, while full coverage is rare. Repair costs may exceed the car’s value, making it a risky investment. However, if the vehicle is fully rebuilt and inspected, limited coverage may be worth considering based on individual needs and budget.

Can You Get Full Coverage on a Rebuilt Title Car?

Getting full coverage for your salvage car in California can be challenging because insurers consider these vehicles risky. Safety concerns, hidden structural damage, limited resale value, and costly repair issues often lead most companies to offer only liability coverage. However, some insurers may provide coverage options beyond just liability.