Salvage vehicle insurance is an insurance policy that covers a car that was previously totaled in an accident and given a salvage title, according to DMV.org. These vehicles are sometimes purchased by new owners and made road-worthy again, requiring the owner to get insurance coverage before driving.
After a vehicle is in an accident, the cost of repairing the vehicle is sometimes more than the car value. In this case, insurance companies usually list the car as totaled and pay the owner the replacement cost of the car. A salvage title is issued for the totaled vehicle, and it can be sold for scrap or to someone who wants to invest the money in repairing it.
Owners of former salvage title vehicles can have a hard time getting car insurance coverage. They often get a pared down salvage insurance that is liability only and doesn't cover any areas relating to the original damage to the vehicle, according to DMV.org.
Car buyers interested in salvage title vehicles should shop around for insurance before buying. It may be easier to find insurance with smaller companies that can offer more flexibility in insurance options, or to contact the Joint Underwriters Association for assistance in finding salvage insurance.