Rebuilt Rides: Does Nj Auto Insurance Cover Rebuilt Title Cars?

If you're wondering whether your auto insurance in New Jersey will cover a rebuilt car, the answer is yes, but it's not a straightforward process. A car with a salvage title, meaning it's been deemed a total loss by an insurance company, cannot be insured or driven on the road. However, if you repair the car to meet New Jersey's standards, you can apply for a rebuilt title, which certifies that the vehicle is now safe to drive and can be insured.

To get a rebuilt title in New Jersey, you'll need to first obtain a salvage title, make the necessary repairs, pass a state inspection, and pay the required fees. The process is lengthy and costly, and even with a rebuilt title, your insurance options may be limited, with higher premiums.

What is a rebuilt title?

A rebuilt title is a type of branded title for a vehicle that has been previously declared a total loss by an insurance company, issued a salvage title, and then repaired to a roadworthy condition.

When a vehicle is "totalled", it means that the cost of repairing it is higher than the car's current value. This can happen due to heavy damage from accidents, extensive flood or hail damage, or damage resulting from theft or vandalism. Once a car is declared totalled, it is usually flagged as "salvage" or "junk", and is not safe for use on public roads. Most salvaged cars are dismantled for parts, and the rest is sent to a crusher.

However, some totalled cars can be repaired and brought back to roadworthy condition. To obtain a rebuilt title, the car must undergo a thorough inspection by the relevant authorities to ensure it is safe to drive. The specific requirements for obtaining a rebuilt title vary by state. For example, in New York, damages must amount to at least 75% of the car's value for it to be designated as salvage, while in Georgia, the buyer must be a licensed rebuilder to purchase a salvage vehicle.

It is important to note that a rebuilt title car may come with certain risks and drawbacks. The repair quality may vary, and there could be significant structural damage that cannot be properly repaired. Additionally, insurance companies may be reluctant to provide coverage for rebuilt vehicles due to the uncertainty of the previous damage and the quality of repairs. Obtaining financing for a rebuilt title car may also be challenging, as many banks do not finance such vehicles. The resale value of a rebuilt title car is also typically lower than that of a car with a clean title.

How to get a rebuilt title in New Jersey

To get a rebuilt title in New Jersey, you must first obtain a salvage title. A salvage vehicle is a vehicle that has been damaged to such an extent that the insurance company considers it uneconomical to repair.

Step 1: Apply for a New Jersey Salvage Title

To apply for a New Jersey salvage title, you must schedule an appointment at a Vehicle Center and bring the following:

• The original vehicle title assigned by you and stamped by your insurance company
• Insurance Listing Sheet (BA-28), filled out by your auto insurance company
• Salvage Title Application (OS/SS-61)
• Proof of lien satisfaction (if applicable)
• Payment for the $60 title fee and a $25 penalty fee, if applicable. The penalty fee is charged if there is a lien on the title or if the request is received more than 10 days after the date of sale shown on the back of the totaled car's title.

Step 2: Make Necessary Repairs to Your Salvage Title Car

Once you have obtained a salvage title, you can begin repairing your car. During the rebuilding process, be sure to:

• Fill out the Salvage Vehicle Information form (OS/SS-4) to ensure your vehicle complies with state standards
• Take photos of the car before starting repairs
• Research and compare costs for professional mechanics in your area, or plan to handle repairs yourself
• Keep all receipts for replacement parts used during the repairs

Step 3: Pass a Salvage Vehicle Inspection

After completing the repairs, submit the following items to your nearest salvage title service location or mail them to the address on the information document:

• Salvage Inspection Application (OS/SS-3)
• A check or money order for the $200 salvage vehicle inspection fee, made payable to the NJ MVC
• Call to schedule your salvage inspection at an approved inspection station listed on the OS/SS-3 application form
• Fax copies of the required items on the OS/SS-4 form to your inspection site
• Bring the following items with you to your inspection:
• Your New Jersey salvage title
• Your completed Salvage Inspection Application form
• A bill of sale for all major component part replacements
• Photographs of the vehicle before and after repairs (a damage report will suffice if before pictures are unavailable)
• Work order (VINs for the parts and repair details)
• Insurance damage report

Step 4: Obtain Essential Documents for a Rebuilt New Jersey Title

After your vehicle has passed the salvage inspection, you can apply for your rebuilt vehicle title. Go to your local New Jersey Motor Vehicle Commission (MVC) office and bring the following documents:

• Photos of all sides of the vehicle (before and after repairs)
• Parts receipts with a full vehicle description (year, make, VIN) and the work order
• Damage report from the car insurance company

Your New Jersey rebuilt title should arrive within 15 to 20 days but can take up to a month. Obtaining a rebuilt title in New Jersey can be a lengthy and costly process, so be prepared for potential delays and expenses.

How to insure a rebuilt title car

A car with a rebuilt title in New Jersey can be insured, but it's more difficult than insuring a car with a clean title. Here are the steps to insure a rebuilt title car:

Step 1: Understand the Process

Firstly, understand that a car with a salvage title—one that's been in an accident and sustained enough damage to be declared a total loss—cannot be insured or legally driven on the roads. However, it can be sold and repaired to obtain a rebuilt title.

Step 2: Get a Salvage Title

If you don't already have a salvage title, you'll need to apply for one at a New Jersey Vehicle Center. This typically involves scheduling an appointment, filling out the necessary forms, and paying a fee.

Step 3: Make Repairs

Once you have a salvage title, you can start repairing the car. Take photos of the car before starting repairs, research and compare costs for professional mechanics, and keep all receipts for replacement parts.

Step 4: Pass a Vehicle Inspection

After making repairs, you'll need to submit an application, pay an inspection fee, and pass a state inspection to ensure the vehicle is roadworthy.

Step 5: Obtain a Rebuilt Title

Once your rebuilt salvage car passes inspection, you can apply for a rebuilt title. This typically involves submitting photos, parts receipts, and a damage report to the New Jersey Motor Vehicle Commission (MVC).

Step 6: Shop for Insurance

Not all insurance companies offer coverage for rebuilt title cars, and those that do may only provide liability insurance. Shop around and contact several insurers to find one that can provide the coverage you need.

Step 7: Provide Required Documentation

Insurers will typically require a certified mechanic's statement, photos or videos of the vehicle, and detailed information on previous repairs.

Step 8: Expect Higher Rates

Be prepared for higher insurance rates. Insuring a car with a rebuilt title typically costs more than a car with a clean title due to the higher risks associated with major repairs.

Step 9: Consider Coverage Options

In some cases, it may be more cost-effective to opt for liability coverage only, rather than full coverage, as the potential payout for damage to a rebuilt title car may be lower.

Step 10: Research Insurers

Some insurance companies that have been mentioned as offering coverage for rebuilt title cars in various states include USAA, Farmers, Geico, State Farm, Progressive, Allstate, and Mercury. However, it's important to note that coverage options and availability may vary by state and on a case-by-case basis.

Companies that insure rebuilt title cars

While it is possible to get insurance for a car with a rebuilt title, it may be more challenging and costly than insuring a car with a clean title. Some companies do not insure rebuilt title cars, while others only offer liability-only coverage.

• State Farm: State Farm offers full-coverage insurance for rebuilt title cars.
• Geico: Geico also provides full-coverage insurance for rebuilt title vehicles but requires an additional inspection.
• Progressive: Progressive offers full-coverage insurance for specific models only.
• Allstate: Allstate offers policies for rebuilt title cars, but there may be restrictions on comprehensive and collision coverage.
• Mercury: Mercury provides insurance for rebuilt title cars, but there may be limitations.
• USAA: USAA offers insurance for rebuilt title cars but is exclusive to members of the military and their families.

When seeking insurance for a rebuilt title car, it is essential to be upfront about the vehicle's title status and compare quotes from multiple companies, as rates and coverage options can vary.

Is a rebuilt title bad?

A rebuilt title is not necessarily bad, but it does come with some risks and complications.

A car with a rebuilt title has been declared a total loss, or "totalled", by an insurance company, often due to extensive damage from an accident, but sometimes due to a manufacturer buyback or an altered odometer. These vehicles are issued a salvage title, which means they are deemed unsafe to drive and cannot be legally registered or insured. However, a salvage car may be purchased and repaired, and if it passes inspection, it can be issued a rebuilt title, making it roadworthy and insurable again.

There are some pros and cons to buying a car with a rebuilt title. On the positive side, these cars are significantly cheaper than similar models with clean titles. However, they may be more expensive to insure, and it may be difficult to find an insurer who will cover them. Some common issues with rebuilt title cars include hidden mechanical issues that require costly repairs, and difficulty reselling the car in the future.

If you are considering buying a car with a rebuilt title, it is important to do your research and be aware of the potential risks. Have a certified mechanic inspect the car to ensure it is safe and roadworthy, and be prepared for higher insurance costs and potential resale complications. While it is possible to find insurance and have a positive experience with a rebuilt title car, it is important to go into the process informed and aware of the potential challenges.

Frequently asked questions