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?
The following excerpts from Kansas Statutes address the proper titling of
vehicles acquired by insurers in the state of Kansas:
Pursuant to Kansas Statutes § 8-199:
(a) Except as provided in subsection (b), it shall be unlawful for any person
to sell or transfer the ownership of any nonhighway vehicle or salvage
vehicle, unless such person shall give to the purchaser thereof an assigned
nonhighway certificate of title or salvage title.
(b) The sale or transfer of ownership of a nonhighway vehicle or salvage
vehicle shall include the acquisition of any such vehicle by an insurer, as
defined by K.S.A. 40-3103, and amendments thereto, from any person upon
payment of consideration therefor in satisfaction of such insurer's
obligation under a policy of motor vehicle insurance but the transferor of a
vehicle for which a title has been issued under K.S.A. 8-135, and
amendments thereto, shall not be required to obtain a nonhighway
certificate of title or salvage title for such vehicle and may assign to the
insurer the certificate of title issued pursuant to K.S.A. 8-135, and
amendments thereto. It shall be unlawful for any insurer to sell or attempt
to sell any nonhighway vehicle or salvage vehicle, through power of
attorney or otherwise, unless such insurer shall obtain a nonhighway
certificate of title or salvage title issued in the name of the insurer.
Pursuant to Kansas Statutes § 8-197(b):
(C)(2)“Salvage vehicle” means:
(A) Any motor vehicle, other than a late model vehicle, which is of a type
required to be registered in this state, but which cannot be registered
because it has been wrecked or damaged to the extent that: The equipment
required by state statute on any such vehicle used on the highways of this
state is not present or is not in good condition or proper adjustment, as
prescribed by state statute or any rules and regulations adopted pursuant
thereto, or such vehicle is in an inoperable condition or a condition that
would render the operation thereof on the highways of this state a hazard to
the public safety; and in either event, such vehicle would require substantial
repairs to rebuild or restore such vehicle to a condition which will permit
the registration thereof;
(B) a late model vehicle which is of a type required to be registered
in this state and which has been wrecked or damaged to the extent
that the total cost of repair is 75% or more of the fair market value of
the motor vehicle immediately preceding the time it was wrecked or
damaged and such condition was not merely exterior cosmetic
damage to such vehicle as a result of windstorm or hail; or
(C) a motor vehicle, which is of a type required to be registered in
this state that the insurer determines is a total loss and for which the
insurer takes title;
(3) “salvage title” means a certificate of title issued by the division
designating a motor vehicle a salvage vehicle;
(4) 'rebuilt salvage vehicle' means any motor vehicle previously issued a
salvage title;
(5) 'rebuilt salvage title' means a certificate of title issued by the division for
a vehicle previously designated a salvage vehicle which is now designated
a rebuilt salvage vehicle . ;
(6) 'late model vehicle' means any motor vehicle which has a
manufacturer's model year designation of or later than the year in which the
vehicle was wrecked or damaged or any of the six preceding years;
(7) 'fair market value' means the retail value of a motor vehicle as:
(A) Set forth in a current edition of any nationally recognized compilation,
including an automated database of retail value; or
(B) determined pursuant to a market survey of comparable vehicles with
regard to condition and equipment;
(8) 'cost of repairs' means the estimated or actual retail cost of parts needed
to repair a vehicle plus the cost of labor computed by using the hourly labor
rate and time allocations for automobile repairs that are customary and
reasonable. Retail costs of parts and labor rates may be based upon
collision estimating manuals or electronic computer estimating systems
customarily used in the automobile industry. The total cost of repairs to
rebuild or reconstruct the vehicle shall not include the cost of repairing,
replacing or reinstalling tires, sound systems, or any sales tax on parts or
materials to rebuild or reconstruct the vehicle.
Pursuant to Kansas Statutes § 8-198(d)(2):
Every insurance company, which pursuant to a damage settlement, acquires
ownership of a vehicle that has incurred damage requiring the vehicle to be
designated a salvage vehicle, shall apply for a salvage title within 30 days
after the title is assigned and delivered by the owner to the insurance
company, with all liens released.
Pursuant to Kansas Statutes § 8-135c(b):
(b)(1) “Nonrepairable vehicle” means any motor vehicle which: (A) Has
been damaged, destroyed, wrecked, burned or submerged in water to the
extent that such motor vehicle is incapable of safe operation for use on
roads or highways and has no resale value except as a source of parts or
scrap only; or (B) the owner irreversibly designates as a source of parts or
scrap;
(2) “Nonrepairable vehicle certificate” means a motor vehicle ownership
document issued by the division designating that vehicle a nonrepairable
vehicle.
(c)(1) Except as otherwise provided by this section, the owner of a vehicle
that meets the definition of a nonrepairable vehicle shall apply to the
division for a nonrepairable vehicle certificate before the ownership of the
motor vehicle is transferred. In no event shall such application be made
more than 30 days after the vehicle is determined to be a nonrepairable
vehicle.
(2) Every insurance company, which pursuant to a damage settlement,
acquires ownership of a vehicle that has incurred damage requiring the
vehicle to be designated a nonrepairable vehicle, shall apply to the division
for a nonrepairable vehicle certificate within 30 days after the title is
assigned and delivered by the owner to the insurance company, with all
liens released. back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on a Salvage Certificate of 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, and an ACV.
Copart will submit these documents along with a Title and Registration
Application, a Salvage, Nonhighway or Non-Repairable Vehicle Affidavit
and the appropriate fee to the Division of Vehicles for processing.
Thereafter, the Division of Vehicles shall issue a Salvage Certificate of
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 Salvage Certificate of Title to
the purchaser. [See Kansas Statutes §§ 8-135, 8-197, 8-198] back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on Nonrepairable Vehicle Certificate?
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, and an ACV.
Copart will submit these documents along with a Title and Registration
Application, a Salvage, Nonhighway or Non-Repairable Vehicle Affidavit,
and the appropriate fee to the Division of Vehicles for processing.
Thereafter, the Division of Vehicles shall issue a Nonrepairable Vehicle
Certificate 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 Nonrepairable Vehicle
Certificate to the purchaser. [See Kansas Statutes § 8-135c] 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
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 a Title and Registration Application and a Salvage, Nonhighway or
Non-Repairable Vehicle Affidavit and the appropriate fee to the Division of
Vehicles for processing.
Thereafter, the Division of Vehicles shall issue Salvage Certificate of Title
in the name of the insurer. Upon receipt, Copart will forward the Salvage
Certificate of Title to the insurer for safekeeping.
If the vehicle is recovered, the Salvage Certificate of Title along with an
ACV and a Police Report will be returned to Copart by the insurer.
If the vehicle is considered a salvage vehicle, Copart, acting upon a power
of attorney for the insurer, will then sell the vehicle at auction and reassign
the insurer’s Salvage Certificate of Title to the purchaser.
However, if the vehicle is considered a Nonrepairable, Copart, acting upon
a power of attorney for the insurer, will apply for a Nonrepairable Vehicle
Certificate in the name of the insurer. Thereafter, Copart, acting upon a
power of attorney for the insurer, will then sell the vehicle at auction and
reassign the insurer’s Nonrepairable Vehicle Certificate to the purchaser. back to top
What steps must an insurer take in Kansas to process an ownerretained vehicle?
Pursuant to Kansas Statutes § 8-135(c)(3):
Every insurance company which makes a damage settlement for a vehicle
that has incurred damage requiring such vehicle to be designated a
nonrepairable vehicle, but does not acquire ownership of the vehicle, shall
notify the vehicle owner of the owner's obligation to apply to the
department for a nonrepairable vehicle certificate for the motor vehicle, and
shall notify the division of this fact in accordance with procedures
established by the division. The vehicle owner shall apply to the division
for a nonrepairable vehicle certificate within 30 days after being notified by
the insurance company.
Pursuant to Kansas Statutes § 8-199(a):
(I)t shall be unlawful for any person to sell or transfer the ownership of any
nonhighway vehicle or salvage vehicle, unless such person shall give to the
purchaser thereof an assigned nonhighway certificate of title or salvage
title.
Pursuant to Kansas Statutes § 8-198(d):
(3) Every insurance company which makes a damage settlement for a
vehicle that has incurred damage requiring such vehicle to be designated a
salvage vehicle, but does not acquire ownership of the vehicle, shall notify
the vehicle owner of the owner's obligation to apply for a salvage title for
the motor vehicle, and shall notify the division of this fact in accordance
with procedures established by the division. The vehicle owner shall apply
for a salvage title within 30 days after being notified by the insurance
company.
(4) The lessee of any vehicle which incurs damage requiring the vehicle to
be designated a salvage vehicle shall notify the lessor of this fact within 30
days of the determination that the vehicle is a salvage vehicle.
(5) The lessor of any motor vehicle which has incurred damage requiring
the vehicle to be titled as a salvage vehicle, shall apply for a salvage title
within 30 days after being notified of this fact by the lessee.
(6) Every person acquiring ownership of a motor vehicle that meets the
definition of a salvage vehicle, for which a salvage title has not been issued,
shall apply for the required document prior to any further transfer of such
vehicle, but in no event, more than 30 days after ownership is acquired. back to top
What legal duties are imposed upon a lienholder following satisfaction
of the lien?
When the indebtedness to a lienholder, whose name is shown upon a title,
is paid in full, such lienholder within 10 days after written demand by
restricted mail, shall furnish to the holder of the title a release of lien or
execute such a release in the space provided on the title. For failure to comply with such a demand the lienholder shall be liable to the holder of
the title for $100 and also shall be liable for any loss caused to the holder
by such failure. When the indebtedness to a lienholder, whose name is
shown upon a title, is collected in full, such lienholder, within 30 days,
shall furnish notice to the holder of title that such indebtedness has been
paid in full and that such title may be presented to the lienholder at any
time for release of lien. [See Kansas Statutes § 8-135(6)] back to top
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