General Rule

• It is possible to get a policy for a salvage-titled vehicle at rates comparable to those for regular vehicles. Most policies on regular cars are anywhere between $500 and $1,200, depending on your state and the make and model of the car, as supported by 2010 data from the Insurance Information Institute. However, usually a salvaged vehicle costs more to insure than one that has not been salvaged, says the CarsDirect website. The exact amount of increase varies from state to state and from company to company, as insurance regulations vary and every company has its own underwriting guidelines related to salvage-titled cars.
  
  

Rationale for Higher Rates

• Most companies that offer salvaged-title vehicle coverage don't offer comprehensive or collision insurance, as claims typically already have been made on the car after the accident. In some states, insurance companies can't offer these coverages according to law, says Carinsurancerates.com. In theory, rates should be lower because you are not getting as much coverage. However, insurance companies consider salvage cars as extremely high risk due to the structural damage they often have had. It is this increase in risk that usually propels salvage policy rates above regular policy rates.
  
  

Issues Calculating Premiums

• A major problem in determining what it will cost to insure a salvage vehicle is that most manufacturers and automotive resources don't calculate the value of salvaged cars, as CarsDirect points out. The reason is that the amount of damage sustained to the vehicle, as well as the cost of refurbishing, varies from accident to accident. Without a solid standard, insurance companies cannot get an accurate picture of what the average worth of a salvage vehicle is. Without understanding the value, insurance companies have trouble offering appropriate coverage, often to the point where some insurance companies don't want to offer salvage-vehicle coverage at all.
  
  

Bottom Line

• It likely will cost you more to insure a salvage-title vehicle than a regular car. You might find an insurer who gives you rates comparable to those for regular cars, but these rates will be based on the blue book value of the vehicle because it is hard for the insurer to determine the worth of a salvaged vehicle. When the insurance company actually has an adjuster look at the vehicle if you get in an accident, the value of the vehicle likely usually will be below this value. This means you'll get a lower payout even though you're paying blue book level premiums. Only you can determine whether it is worth this extra money to insure the car.