by mikailw » Tue Nov 18, 2008 04:01 am
I'm looking at purchasing a used 1999 Honda Civic EX Coupe. The issue is it has a salvaged title because 2 owners ago it was bought in an insurance auction after theft recovery.
How much should that take off the value of the car?
What insurance issues might I run into when I try to insure it?
How much should that take off the value of the car?
What insurance issues might I run into when I try to insure it?
Posted: Tue Nov 18, 2008 04:18 am Post Subject:
One thing that might happen is... You will likely pay the same premium amount as you would for this same car with a clear title. But if it gets Totaled again your insurer will likely offer half (or less) the value of that clear titled car that would have paid the same Premiums as you.
I'm sure someone will correct me if I'm mistaken. :)
FK,
Posted: Tue Nov 18, 2008 04:40 am Post Subject:
FK is correct.
When making an offer on a total loss, insurance companies usually take 25% off the value if the vehicle has a salvage title.
I don't think a vehicle would get a salvage title just because it was a theft/recovery... though this could be the case. I'd question if it also had enough damage to it that it was required to get a salvage title. Buyer beware.
Posted: Tue Nov 18, 2008 06:37 am Post Subject:
Some companies may not even insure a car with a salvage title on it or even if they do that will be only for liability and not the collision and comprehensive coverage. You're required to check this out first with the insurance companies.
The state motor vehicle laws will also play an important role insuring a salvaged car. Some states don't even allow the salvage vehicles on the road.
~Jeremy
Posted: Tue Nov 18, 2008 06:56 am Post Subject:
What insurance issues might I run into when I try to insure it?
The major issue that you might encounter is that insurers may deny insuring the vehicle. I'd suggest that you maintain the state minimum on the car, as a proof of financial liability. Maintaining comprehensive and collision on it would be redundant.
Posted: Tue Nov 18, 2008 11:08 am Post Subject:
How much should that take off the value of the car?
about 25% and Fred is 100% correct...IF that is a carrier will write collision and comp on it...most will, most won't ask about the title UNTIL it's totaled...if you aren't wanting to put coll/comp on it, then that's a non-issue with you..I don't think a vehicle would get a salvage title just because it was a theft/recovery... though this could be the case. I'd question if it also had enough damage to it that it was required to get a salvage title. Buyer beware.
I don't know Todd, i've totaled plenty (more than 50%) of theft recoversy, they get them in wrecks and just tear the crap out of 'em...the other way there could be a salvaged title is some states if the carrier would've already settled and vehicle recovered after settlement and insured didn't want it back...some states require recovered theft titles to be branded....OP how long ago was this total? You can ask your carrier to run a NICB on the VIN this should show the company and amount claim but in your case never mind...that won't show the damage...is it's a concern call the owner that had it when it totaled, ,and ask about the amount of damage the vehicle had....when recovered.
Posted: Tue Nov 18, 2008 11:49 pm Post Subject:
You may not be able to get full coverage on the vehicle. The insurance company will want to take a close look at it. You will also have a harder time in selling the vehicle and may not get what the car is worth. A salvaged car will always be on the lowest side of the book value. The damage will always remain on carfax as well.
Posted: Wed Nov 19, 2008 02:35 am Post Subject:
So even though you would get 25% less you would still have to pay the same as if it wasn't? wow thats crazy...Probaly a good reason. I have heard of people buying vehicles with salvage titles. Usually around here they will pay alot less for them or rebuild their own after a wreck and have to send to the State for the salvage title...After a complete inspection by a state backed garage. My brother rebuilt one once and said it really wasn't worth the hassle.
Posted: Thu Nov 20, 2008 11:52 am Post Subject:
You may not be able to get full coverage on the vehicle. The insurance company will want to take a close look at it.
Only for collision and comp, this would not affect liability coverages at all..and frankly most carriers don't ask spit about the title status..So even though you would get 25% less you would still have to pay the same as if it wasn't? wow thats crazy
Fire, it's because when they insure the vehicle there is no ACV determination at that time (or ever unless it totals)...same if say, you bought a car that had 5k in hail damage on it..you total it 3 yrs later, and that damage (a percentage) is taken from the ACVPosted: Thu Nov 20, 2008 03:27 pm Post Subject:
Ok really makes sense..always does when you explain it! LOL
Posted: Mon Aug 31, 2009 09:26 pm Post Subject: Buying recovered thefts with branded titles
A salvage title is generally issued when a vehicle is totalled by an insurance company, however, the specific rules vary from state to state. On "out of sight" losses such as theft, if the vehicle is not recovered before the claim is settled and the insurance company takes title to it, they will routinely obtain a salvage title because they don't know what the condition of the vehicle will be when and if it is recovered. If it is subsequently recovered and there is no damage (or 'minimal" or "insignificant" damage), the insurance company can request that the salvage brand be removed. Some state might be reluctant to do this, or may nopt do it at all, but those that permit it will investigate the matter thoroughly and if everything checks out, they will "correct" the title. I've done this in Minnesota twice (2000 Avalon in 2000 and a 1999 Ford truck in 2007) and both titles had their brands removed. CARFAX reports on either of these vehicles don't even mention the prior theft. Both are insured for collision and comp and the insurance company has never questioned the prior status which makes me think the CLUE report (available to underwriters) makes no mention of the prior salvage status either. My daughter also bought a recovered theft and my son has bought one recovered theft from insurance companies and these were also cleared with little hassle. We had the benefit of some very cooperative DMV contacts and we were patient and cooperative with them as they investigated.
There are benefits to buying recovered thefts, but the key is to make sure they are undamaged when recovered. Heck, on my 2000 Avalon, which had 4400 miles on it when I bought it, I even had the benefit of the remaining factory warranty.
I am a retired insurance claim manager and former director of salvage and subrogation operations for a major property/liability insurer.
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