What form of title must an insurer obtain in connection with the sale of
a vehicle that has been acquired through the settlement of a claim?
Alabama Code § 32-8-87 provides that:
[omitted]
When the frame or engine is removed from a motor vehicle and
not
immediately replaced by another frame or engine, or when an
insurance company has paid money or made other monetary
settlement as compensation for a total loss of any motor vehicle, the
motor vehicle shall be considered to be salvage. The owner of every
motor vehicle in which total loss or salvage has occurred shall,
within 72 hours after the total loss or salvage occurs, make
application for a salvage certificate of title and forward to the
department the certificate of origin or certificate of title to the motor
vehicle, whereupon the department shall process the certificate of
origin or certificate of title in a manner prescribed by law or
regulation. An insurance company which pays money or makes
other monetary settlement as compensation for total loss of a motor
vehicle shall at the time of payment or monetary settlement obtain
the vehicle's certificate of origin or certificate of title and, as soon as
practicable after receiving them, shall forward them along with their
application for a salvage certificate, to the department for
processing. In the event the payment or monetary settlement was
made because of the theft of the vehicle, which shall be considered a
total loss as defined in this section, the insurance company shall
forward the vehicle's properly assigned certificate of origin or
certificate of title as provided herein, to the department as soon as
practicable after the vehicle is recovered. When a stolen motor
vehicle has been reported to the department in compliance with this
section and is later recovered, and for which a salvage certificate has
been issued, the owner recorded on the salvage certificate shall
assign that certificate to the purchaser. A person who violates this
subsection shall, upon conviction, be guilty of a Class C is demeanor
and shall be punishable as required by law.
If an insurance company acquires a motor vehicle in settlement
of an
insurance claim and holds the vehicle for resale and procures the
certificate of origin or certificate of title from the owner or
lienholder within 15 days after delivery of the vehicle to the
insurance company, and if the vehicle was not a total loss as defined
by this section, the insurance company need not send the certificate
of origin or certificate of title to the department but, upon
transferring the vehicle to another person, other than by the creation
of a security interest, the insurance company shall complete an
affidavit of acquisition and disposition of the motor vehicle on a
form prescribed by the department and deliver the certificate of
origin or certificate of title, affidavit, and any other documents
required by the department to the transferee at the time of delivery of
the motor vehicle.
For the purposes of this section, a total loss shall occur when an
insurance company or any other person pays or makes other
monetary settlement to a person when a vehicle is damaged and the
damage to the vehicle is greater than or equal to 75 percent of the
fair retail value of the vehicle prior to damage as set forth in a
current edition of a nationally recognized compilation of retail
values, including automated data bases, as approved by the
department. The compensation for total loss as defined in this
subsection shall not include payments by an insurer or other person
for medical care, bodily injury, vehicle rental, or for anything other
than the amount paid for the actual damage to the motor vehicle. A
vehicle that has sustained minor damage as a result of theft or
vandalism shall not be considered a total loss. Any person acquiring
ownership of a damaged motor vehicle that meets the definition of
total loss for which a salvage title has not been issued shall apply for
a salvage title, other than a scrap metal processor acquiring such
vehicle for purposes of recycling into metallic scrap for remelting
purposes only. This application shall be made before the vehicle is
further transferred, but in any event, within 30 days after ownership
is acquired.
[omitted]
[omitted]
The department is authorized to issue a salvage certificate of title
for a fee of $15.00, on a form prescribed by the department which
shall provide for assignments of this title. The salvage certificate of
title is to replace a certificate of origin or certificate of title required
to be surrendered by this section. The department shall prescribe
necessary forms and procedures to comply with this subsection.
It shall be unlawful for a person to sign as assignor or for a
person to
have in his or her possession a salvage certificate of title which has
been
signed by the owner as assignor without the name of the assignee
and other information called for on the form prescribed by the
department. A person who violates this subsection, upon conviction,
shall be guilty of a Class C misdemeanor and shall be punishable as
required by law.
Every owner of a salvage or junk motor vehicle who sells or
transfers the vehicle to any person other than to a scrap metal
processor for purposes of recycling into metallic scrap for remelting
purposes only, shall provide at the time of the sale or transfer a
properly executed assignment and warranty of title to the transferee
in the space provided therefor on the salvage certificate of title or
junk certificate of title or as the department prescribes. A person
who willfully violates this subsection shall, upon conviction, be
guilty of a Class C misdemeanor and shall be punishable as required
by law.
The department may issue a certificate of title to any motor
vehicle for which a salvage certificate has been issued by this or any
other state, and the vehicle has, in this state, been completely
restored to its operating condition which existed prior to the event
which caused the salvage certificate of title to issue, provided that all
requirements of this section have been met. No certificate of title
shall be issued for any motor vehicle for which a "junk" certificate
has been issued or for a vehicle which is sold "for parts only."
through
[omitted]
Each person who sells, exchanges, delivers, or otherwise
transfers any interest in any vehicle for which a title bearing the
designation "salvage" or "rebuilt" has been issued shall disclose in
writing the existence of this title to the prospective purchaser,
recipient in exchange, recipient by donation, or recipient by other act
of transfer. The disclosure, which shall be made at the time of or
prior to the completion of the sale, exchange, donation, or other act
of transfer, shall contain the following information in no smaller
than 10 point type: "This vehicle's title contains the designation
'salvage' or 'rebuilt'."
Further, if the vehicle is a total loss vehicle and will not be rebuilt, the
vehicle must be sold on a Certificate of Title with the legend “Salvage Title
– Vehicle Sold for Parts Only – Nonrebuildable.” back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on a Certificate of Title (aka “Clean Title”)?
The insurer shall provide Copart with a Certificate of Title or a comparable
ownership document issued by another state or jurisdiction (either endorsed
over to the insurer or accompanied by a power of attorney), an odometer
disclosure statement, a release of any liens, an ACV, a cost of repair, and an
Affidavit of Acquisition and Disposition of a Nontotal Loss Vehicle by
Insurance Company.
Copart, acting under a power of attorney for the insurer, will then sell the
vehicle at auction and reassign the insurer’s Certificate of Title to the
purchaser. If the re-assignments on the Certificate of Title have been
exhausted, Copart, acting under a power of attorney for the insurer, will fill
out a Reassignment Supplement of Certificate of Title (MVT 8-3) to the
new purchaser. [See Alabama Code § 32-8-44; Alabama Administrative
Code §§ 810-5-75-46, 810-5-75-38] back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on a Certificate of Title with the legend “Salvage Title”?
The insurer shall provide Copart with a Certificate of Title or a comparable
ownership document issued by another state or jurisdiction (either endorsed
over to the insurer or accompanied by a power of attorney), an odometer
disclosure statement, a release of any liens, an ACV, and a cost of repair.
Copart will submit these documents along with an Application for Salvage
Certificate of Title (MVT 41-1) and the appropriate fee to the Motor
Vehicle Division for processing.
Thereafter, the Motor Vehicle Division shall issue a Certificate of Title
with the legend “Salvage Title” in the name of the insurer.
Copart, acting under a power of attorney for the insurer, will then sell the
vehicle at auction and reassign the insurer’s Certificate of Title with the
legend “Salvage Title” to the purchaser. [See Alabama Code § 32-8-
87(b)&(c); Alabama Administrative Code §§ 810-5-17-01, 810-5-75-44] back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on Certificate of Title with the legend “Salvage Title - PartsOnly – Non-Rebuildable”?
The insurer shall provide Copart with a Certificate of Title or a comparable
ownership document issued by another state or jurisdiction (either endorsed
over to the insurer or accompanied by a power of attorney), an odometer
disclosure statement, a release of any liens, an ACV, and a cost of repair.
Copart will submit these documents along with an Application for Salvage
Certificate of Title (MVT 41-1) and the appropriate fee to the Motor
Vehicle Division for processing.
Thereafter, the Motor Vehicle Division shall issue a Certificate of Title
with the legend “Salvage Title - Parts-Only - Non-Rebuildable” in the name
of the insurer.
Copart, acting under a power of attorney for the insurer, will then sell the
vehicle at auction and reassign the insurer’s Certificate of Title with the
legend “Salvage Title - Parts-Only - Non-Rebuildable” to the purchaser.
[See Alabama Code § 32-8-87(b) & (c); Alabama Administrative Code §
810-5-17-01] back to top
What documents must an insurer provide to Copart in order to sell a
recovered theft vehicle recovered substantially intact with no
substantial damage, where title is still in the name of the insured?
When a vehicle has been stolen, the insurer shall provide Copart with a
Certificate of Title or a comparable ownership document issued by another
state or jurisdiction (either endorsed over to the insurer or accompanied by
a power of attorney), an odometer disclosure statement with last known
mileage, and a release of any liens.
After receipt of these documents, Copart will submit these documents along
with an Application for Salvage Certificate of Title (MVT 41-1) and the
appropriate fee to the Motor Vehicle Division for processing.
Thereafter, the Motor Vehicle Division shall issue Certificate of Title with
legend “Salvage Title” in the name of the insurer. Upon receipt, Copart
will forward the Certificate of Title with the legend “Salvage Title” to the
insurer for safekeeping.
If the vehicle is recovered, the Certificate of Title with the legend “Salvage
Title” along with an ACV and a cost of repair will be returned to Copart by
the insurer in order to obtain the appropriate title depending upon the
damage to the vehicle.
Copart, acting upon a power of attorney for the insurer, will then sell the
vehicle at auction and reassign the insurer’s Certificate of Title (with
legend, where appropriate) to the purchaser. [See Alabama Code § 32-8-
87(b)&(c); Alabama Administrative Code § 810-5-17-01] back to top
What steps must an insurer take in Alabama to process an ownerretained vehicle?
Pursuant to Alabama Code § 32-8-87(d):
For the purposes of this section, a total loss shall occur when an insurance
company or any other person pays or makes other monetary settlement to a person
when a vehicle is damaged and the damage to the vehicle is greater than or equal
to 75 percent of the fair retail value of the vehicle prior to damage as set forth in a
current edition of a nationally recognized compilation of retail values, including
automated data bases, as approved by the department. The compensation for total
loss as defined in this subsection shall not include payments by an insurer or other
person for medical care, bodily injury, vehicle rental, or for anything other than
the amount paid for the actual damage to the motor vehicle. A vehicle that has
sustained minor damage as a result of theft or vandalism shall not be considered a
total loss.
Any person acquiring ownership of a damaged motor vehicle that meets the
definition of total loss for which a salvage title has not been issued shall apply for
a salvage title, other than a scrap metal processor acquiring such vehicle for
purposes of recycling into metallic scrap for remelting purposes only. This
application shall be made before the vehicle is further transferred, but in any
event, within 30 days after ownership is acquired. back to top
What legal duties are imposed upon a lienholder following satisfaction
of the lien?
Following satisfaction of lien, the lienholder shall, within 10 days after demand,
execute a release of lien in the space provided on the certificate of title and deliver
the certificate and release to the next lienholder named therein, or if none, to the
owner. The owner then mails or delivers the certificate to the Department. The
Department will release the lienholder’s rights and issue a new certificate. A
person convicted of a misdemeanor for the violation of the above provision is
punishable by a fine of not more than $500.00 or by imprisonment for not more
than six months, or by both such fine and imprisonment. [See Alabama. Code §§
32-8-64; 32-8-14] back to top
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