In Texas, a blue title refers to a vehicle that has been previously totaled, flooded, or salvaged. While these vehicles can sometimes be purchased at a lower price, they come with risks – namely, the difficulty in getting insurance coverage. Most standard auto insurance companies will not insure a car with a blue title in Texas. However, there are some limited options available for those looking to insure a blue title vehicle in the Lone Star State. In this article, we’ll examine the challenges of insuring a blue title car in Texas, requirements for coverage, tips for finding an insurer, and the costs involved.
What is a Blue Title?
In Texas, vehicles are issued a blue title, rather than a standard title, if they meet certain criteria:
- Total loss – This means the vehicle was deemed a total loss, generally when repair costs exceed the vehicle’s pre-damage value. This usually occurs after a major collision. The insurance company pays out the value of the vehicle, takes possession of it, and the vehicle is issued a salvage title.
- Flood damage – Any vehicle where flood damage compromised the safety or proper function of mechanical or electrical parts gets a flood title in Texas.
- Rebuilt/reconstructed – Vehicles that were totaled and then rebuilt or reconstructed receive a blue title. This includes kit cars assembled from salvaged parts.
- Stolen & recovered – Vehicles that were stolen and later recovered, even if undamaged, receive a blue title.
- Salvage title – This is issued for a vehicle deemed a total loss in another state and could indicate flood damage, rebuilt parts, or other issues.
So in summary, a blue title in Texas flags the vehicle as having prior significant damage, flood history, or other potential issues. This history makes insurers leery of providing coverage.
Challenges of Insuring a Blue Title Vehicle
While it’s not impossible to insure a blue title vehicle in Texas, it presents some key challenges:
- High risk – Insurance companies view blue title vehicles as high risk given their history of damage. This makes them reluctant to offer coverage.
- Low value – Blue title cars tend to have lower value than similar clean-title vehicles. This lower value makes it harder to justify comprehensive and collision coverage.
- Difficulty determining risk – With rebuilt vehicles, it can be hard for insurance companies to assess current condition and risk factors accurately.
- Higher claims – There is data showing blue title vehicles have higher claims frequency and severity compared to clean title vehicles.
- Fraud potential – Flooded cars may be cleaned up cosmetically but still have significant damage. This raises concerns about fraud.
Insurers weigh these factors and often determine the risks outweigh potential rewards of insuring these vehicles. Many will outright deny coverage while others charge significantly higher premiums. This limits consumers’ options.
Requirements for Insuring a Blue Title Vehicle
While every insurance company will have its own policies, some general requirements exist for those that will insure a blue title car in Texas:
- Inspection – Most insurers will require a recent inspection to confirm the car’s current condition and roadworthiness. This must typically be done by a licensed mechanic.
- Documentation – You’ll need to provide documentation on the car’s history and title status. This helps the insurer properly assess risk.
- Premium payment – Expect to pay the full premium up front. Installment plans are typically not available for blue title cars.
- Age/mileage – There are often restrictions based on the vehicle’s age and mileage. For example, some may decline coverage once past 10 years/100k miles.
- Claims history – Expect to provide detailed claims history for the vehicle if previously insured.
Meeting these requirements provides the best chance of finding an insurer willing to offer a policy. But even then, your options will still be limited.
Tips for Finding an Insurer
Here are some tips for locating an insurance company that will insure a blue title vehicle in Texas:
- Seek out nonstandard auto insurers that specialize in high-risk vehicles.
- Independent agents who work with multiple insurers may know of companies more open to blue titles.
- Consider a state minimum liability-only policy to lower required coverage.
- Ask other blue title owners for insurer recommendations online.
- Maintain a good driving record and provide proof to show lower risk.
- Ask insurers if they will reconsider with inspection/documentation.
- Comparison shop for best rates – they can vary widely.
Casting a wide net with both standard and nonstandard insurers maximizes your chances. Be prepared to put in legwork contacting multiple agents to explain your situation.
What Will it Cost?
Insurance for blue title vehicles in Texas is expensive – often two to three times higher than normal rates. Expect to pay the following:
| Coverage Type | Typical Annual Premium |
|---|---|
| Basic liability | $2,000+ |
| Liability + comp/collision | $4,000+ |
Rates vary based on:
- Car make, model, and year
- Your driving and credit history
- Extent of damage on the title
- Your location in Texas
Given the high cost, purchasing maximum coverage is unrealistic for many blue title owners. Prioritize state minimum liability at a minimum.
Comprehensive and collision can also be prohibitive. Consider dropping these coverages if the car’s value is under $5,000. The premiums may well exceed payouts in the event of a total loss.
Alternatives to Traditional Insurance
If you’ve exhausted all options and still can’t find an insurer, alternatives to traditional policies exist:
- Surety bond – This provides proof of financial responsibility required by law without an insurer. But they typically cost more than normal premiums.
- State auto plan – In Texas this is TexasSure and provides last-resort liability coverage only.
- Self-insurance – You deposit cash with the state to cover potential claims up to state minimums. Not recommended given the high financial risk.
These options ensure legal minimum coverage but come with their own challenges and expenses. Traditional insurance should be pursued first.
Can I Insurance a Blue Title Vehicle I Just Bought?
Getting insurance right after purchasing a blue title vehicle in Texas can be tricky. Some tips include:
- Leave the car’s title as salvage/blue until obtaining insurance quotes.
- Get quotes before finalizing the purchase if possible.
- Be prepared to pay higher premiums.
- Inspect carefully so you know the car’s true condition.
- Find an insurer that will work with recent purchases.
- See if the seller’s current insurer will extend coverage.
Buying first and finding unaffordable insurance rates after is an all too common scenario. Do your homework upfront to avoid this headache.
Conclusion
Insuring a blue title car in Texas takes effort but can be done in certain circumstances. Shop nonstandard companies, provide documentation of current condition, be prepared for higher rates, and consider alternatives like a surety bond if needed. With a clean driving history and some perseverance, coverage is attainable. But shop wisely – not all blue title vehicles are worth take on the insurance challenge.
