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Get a Salvage Title and How That Title Affects Your Car Insurance in Ohio

The answer is a resounding "Probably." Yes, I know how much you hate such answers, BUT Ohio car insurance is not always black and white. Unfortunately, there is a lot of gray depending on the situation. So let's take a deeper look at the process that primarily leads to a rescue title AND how many car insurance companies handle vehicle insurance with rescue titles.

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The Road to Getting a Salvage Title- Step 1

- Accident

So let's take a few steps back and start at the beginning. You are involved in an accident and your vehicle is damaged. If the accident is your fault, your insurance would be liable to repair your damage, provided you have extensive and / or collision with your insurance (whichever would be liable would depend on the nature of the accident).

If the accident is someone else's fault, then their policy would be to pay for damages.

The way to get a salvage title- Step 2- The damage agreement

Regardless of who is at fault, the process is the same: the business adjuster reviews the estimate for repair and collects information from a variety of resources to determine the actual cash value of the vehicle. IF the cost of repair is within a certain amount, or even as a percentage of the actual cash value (remember that this varies between insurance companies), the adjuster will consider the vehicle as a total loss and pay the value of the vehicle minus any applicable deductions.

The way to get a salvage title – Step 3 – Decision to "buy back" the vehicle from the insurance company

When the insurance company has made its payment, the vehicle is now theirs. It is usually sold at an auction or salvage and used for parts. The insurance company would retain the proceeds from that sale.

In some cases you can choose to keep the car. Maybe it's too sentimental value or because it's just a great car. But the choice is to keep that vehicle. If this is the case, the insurance company will refrain from that salvage process and hand over the car to you. You get paid the real cash value minus the amount that the car would have at auction (residual value). State law dictates whether you can buy back a vehicle when it is declared a total loss – in Ohio you can.

The last step is to apply for a refund via BMV. The insurance company will often help you guide you through this process, but you can visit the Ohio BMV website for additional information and document requirements.

So, how can I get insurance on this vehicle with a salvage title?

As a general rule, most insurance companies will insure a vehicle with a refund title (disclaimer: ALWAYS CHECK WITH YOUR insurance company FIRST). However, the vehicle may only be eligible for certain types of coverage.

For example, our carriers state that they will insure a vehicle with a salvage title, but ONLY for liability insurance. This means that you can not get extensive and collision coverage (which covers damage to the vehicle).

The reason is simple – if a car has a recovery title, the insurance company knows that it has already been seriously damaged. They do not want to be on the hook and insure a car with existing damage and pay future damages as a result of the existing damage. End of story.

So I can get liability protection but no extensive and collision. How do I change it?

Fortunately, there is a process to eliminate the rescue title and get a clean title issued. The Ohio State Highway Patrol must inspect the vehicle to assess roadworthiness, verify ownership of parts, and review all documentation. For more information and / or to schedule an inspection, visit the Vehicle Inspection Gateway.

When you pass the inspection, they will provide the proof you need to go to BMV to get a regular title issued. You will also need to complete additional paperwork for BMV.

When you have a clean title in hand, you can take it to your insurance company to discuss the addition of extensive and / or collision to the vehicle. Keep in mind that insurance companies may have their own rules for eligibility for extensive / collision EXCEPT the issue of salvage. For example, they can limit based on age. Double check with your company about the availability of comprehensive and collision coverage BEFORE going through this process, as you may find that it is not worth it.

The Morals of History… ..

So, at least in Ohio (and that's the only state we're licensed in, so that's all I care about;), chances are you can get insurance on a vehicle with a salvage title. BUT the type of coverage you can get will probably only be limited to liability.

When the vehicle passes the Highway Patrol safety inspection, THEN you can apply for a clean title (read, NOT SAVE). The final step would be to contact your insurance company for information on how to add comprehensive and / or collision coverage to the vehicle.

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