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?
Except for a late model vehicle that has been stolen and recovered and that
has no major component part removed, missing, or destroyed, or damaged
and not salvageable, an insurance company licensed to conduct business in
this state that acquires ownership of a late model vehicle through the
payment of a claim shall proceed under either of the following:
(a) If the insurance company acquires ownership of the vehicle through
payment of a claim, the owner of the vehicle shall assign the certificate of
title to the insurance company which shall do all of the following:
(i) Surrender a properly assigned certificate of title to the secretary of state.
(ii) If the estimated cost of repair, including parts and labor, is equal to or
more than 75% but less than 91% of the predamaged actual cash value of
the vehicle, apply for a salvage certificate of title, and if the estimated cost
of repair, including parts and labor, is equal to or greater than 91% of the
predamaged actual cash value of the vehicle, apply for a scrap certificate of
title. The insurance company shall not sell the vehicle without first
receiving a salvage or scrap certificate of title, which shall be assigned to
the buyer. An insurance company may assign a salvage or scrap certificate
of the title only to an automotive recycler, used or secondhand vehicle parts
dealer, foreign salvage vehicle dealer, or vehicle scrap metal processor.
[Michigan Vehicle Code § 257.217c(2)]
If an insurance company acquires ownership of a vehicle other than a late
model vehicle through payment of damages due to an accident, the
company shall surrender a properly assigned title to the buyer upon
delivery. [Michigan Vehicle Code § 257.217c(3)]
If a leasing company, vehicle manufacturer, insurance company not
licensed to do business in this state, association, repossession company,
self-insured owner, financial institution, governmental entity, or other
company, institution, or entity, owns a distressed, late model vehicle, the
titleholder shall surrender the title or assigned certificate of title to the
secretary of state and apply for a salvage certificate of title if the retail cost
of repair, including parts and labor, is equal to or greater than 75% but less
than 91% of the predamaged actual cash value of the vehicle, or if the retail
cost of repair, including parts and labor, is equal to or greater than 91% of
the predamaged actual cash value of the vehicle, apply for a scrap
certificate of title, before the vehicle may be transported or sold. If
ownership is transferred, the owner shall sell the vehicle only to a dealer
who is eligible to buy a salvage or scrap vehicle in this state unless the
owner complies with subsection (12). When a leasing company, vehicle
manufacturer, insurance company not licensed to do business in this state,
association, repossession company, self-insured owner, financial institution,
governmental entity, or other company, institution, or entity, estimates the
repair of a distressed, late model vehicle for the purpose of determining
whether to apply for a salvage or scrap certificate of title, a complete record
of the estimate and, if the vehicle is repaired before a transfer of ownership,
a complete record of the actual cost of the repairs performed and by whom
shall be maintained for a minimum of 5 years by the leasing company,
vehicle manufacturer, insurance company not licensed to do business in this
state, association, repossession company, self-insured owner, financial
institution, governmental entity, or other company, institution, or entity.
The estimates and repair records required by this subsection shall be
available for unannounced inspections by a law enforcement agency or a
representative of the secretary of state. The secretary of state may request a
leasing company, vehicle manufacturer, insurance company not licensed to
do business in this state, association, repossession company, self-insured
owner, financial institution, governmental entity, or other company,
institution, or entity to provide copies of title documents, repair estimates,
claims reports involving major component parts, and actual cash value
determination documents to assist the secretary of state in monitoring
compliance with this act. [Michigan Vehicle Code §257.217c(9)]
The following definitions apply to the above legal citations:
"Distressed vehicle" means a vehicle that has a major component part that
has been wrecked, destroyed, damaged, stolen, or missing to the extent that
the total estimated cost of repairs to rebuild or reconstruct the vehicle,
including parts and labor, is equal to or exceeds 75% of the actual cash
value of the vehicle in its predamaged condition. The estimated costs of the
repair parts shall be determined by using the current published retail cost of
original manufacturer equipment parts or an estimate of the actual cost of
the repair parts. The estimated labor costs shall be computed by using the
hourly rate and time allocations which are reasonable and commonly
assessed in the repair industry in the community where the repairs are
performed. For the purpose of this section, "actual cash value" means the
retail dollar value of a vehicle as determined by an objective vehicle
evaluation using local market resources such as dealers or want ads or by
an independent vehicle evaluation or appraisal service or by a current issue
of a nationally recognized used vehicle guide for financial institution
appraisal purposes in this state. [Michigan Vehicle Code § 257.12a]
"Late model vehicle" means a vehicle weighing 8,000 pounds or less,
manufactured in the current model year or the 5 model years immediately
preceding the current model year, or, if over 8,000 pounds, a vehicle
manufactured in the current model year or the 15 model years immediately
preceding the current model year. [Michigan Vehicle Code § 257.24b]
"Major component part" means 1 of the following parts of a vehicle:
(a) The engine.
(b) The transmission.
(c) The right or left front fender.
(d) The hood.
(e) A door allowing entrance to or egress from the vehicle's passenger
compartment of the vehicle.
(f) The front or rear bumper.
(g) The right or left rear quarter panel.
(h) The deck lid, tailgate, or hatchback.
(i) The trunk floor pan.
(j) The cargo box of a pickup.
(k) The frame, or if the vehicle has a unitized body, the supporting structure
or structures that serve as the frame.
(l) The cab of a truck.
(m) The body of a passenger vehicle. [Michigan Vehicle Code § 257.27a]
"Flood vehicle" means a vehicle that was submerged in water to the point
that water entered the passenger compartment or trunk over the sill of the
trunk floor pan or doorsill or a vehicle acquired by an insurance company
as part of the settlement of a water damage claim. [Michigan Vehicle Code
§ 257.17c]
Note: A clean flood, salvage flood, or scrap flood title can be issued
depending upon damage. back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on a 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 by insured or endorsed by insurer accompanied by a power of
attorney from insured to insurer and Copart), an odometer disclosure statement, a
release of any liens, an ACV, and a cost of repair.
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.
[Michigan Vehicle Code § 257.217c]
Note: In Michigan, five (5) re-assignments of title are allowed for dealers before
you have to apply to the Secretary of State for a new title. back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on a Flood Vehicle Certificate of Title (“clean flood”)?
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 by insured or endorsed by insurer accompanied by a power of
attorney from insured to insurer and Copart), an odometer disclosure statement, a
release of any liens, an ACV, and a cost of repair.
Copart, acting under a power of attorney for the insurer, will then sell the vehicle
at auction and reassign the insurer’s Flood Vehicle Certificate of Title to the
purchaser. [Michigan Vehicle Code §§ 257.217c and 257.17c] back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on a 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 by insured or endorsed by insurer accompanied by a power of
attorney from insured to insurer and Copart), 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 an Original
Michigan Salvage Title (TR-12) and the appropriate fee to the Secretary of State
for processing.
Thereafter, the Secretary of State shall issue a Certificate of Title for Salvage
Vehicle 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 for Salvage Vehicle to the
purchaser. [Michigan Vehicle Code § 257.217c] back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on a Salvage Flood Vehicle 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 by insured or endorsed by insurer accompanied by a power of
attorney from insured to insurer and Copart), 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 an Original
Michigan Salvage Title (TR-12) and the appropriate fee to the Secretary of State
for processing.
Thereafter, the Secretary of State shall issue a Salvage Flood Vehicle 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 Flood Vehicle Certificate of Title to
the purchaser. [Michigan Vehicle Code §§ 257.17c and 257.217c(b)] back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on a Scrap 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 by insured or endorsed by insurer accompanied by a power of
attorney from insured to insurer and Copart), 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 an Original
Michigan Scrap Title (TR-12) and the appropriate fee to the Secretary of State for
processing.
Thereafter, the Secretary of State shall issue a Scrap 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 Scrap Certificate of Title to the purchaser.
[Michigan Vehicle Code § 257.217c] back to top
What documents must an insurer provide to Copart in order to sell a
vehicle on a Scrap Flood Vehicle 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 by insured or endorsed by insurer accompanied by a power of
attorney from insured to insurer and Copart), 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 an Original
Michigan Scrap Title (TR-12) and the appropriate fee to the Secretary of State for
processing.
Thereafter, the Secretary of State shall issue a Scrap Flood Vehicle 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 Scrap Flood Vehicle Certificate of Title to the
purchaser. [Michigan Vehicle Code §§ 257.17c and 257.217c(b)] 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 by insured or endorsed by insurer accompanied by a
power of attorney from insured to insurer and Copart), 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 an Original Michigan Title (TR-11) and the appropriate fee to
the Secretary of State for processing.
Thereafter, the Secretary of State shall issue a Certificate of Title in the name of
the insurer. Upon receipt, Copart will forward the Certificate of Title to the
insurer for safekeeping.
If the vehicle is recovered, the 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 year and damage to the vehicle. However, if one or more component parts are nonsalvageable, regardless of the percentage of damage, a Certificate of
Title for Salvage Vehicle is required on a recovered theft vehicle only.
Copart, acting upon a power of attorney for the insurer, will then sell the vehicle at
auction and reassign the insurer’s Title to the purchaser. back to top
What steps must an insurer take in Michigan to process an ownerretained vehicle?
Pursuant to Michigan Vehicle Code § 257.217c(2)(b):
Except for a late model vehicle that has been stolen and recovered
and that has no major component part removed, missing, or
destroyed, or damaged and not salvageable, an insurance company
licensed to conduct business in this state that acquires ownership of a
late model vehicle through the payment of a claim shall proceed
under either of the following:
(b) If after payment of a total loss claim the insurance company permits
the owner of the vehicle to retain ownership, the insurance company
shall do all of the following:
(i) If the estimated cost of repair, including parts and labor, is equal to
or greater than 75% but less than 91% of the predamaged actual cash
value of the vehicle, require each owner of the vehicle to sign an
application for a salvage certificate of title, or if the estimated cost of
repair, including parts and labor, is equal to or greater than 91% of
the predamaged actual cash value of the vehicle, require each owner
of the vehicle to sign an application for a scrap vehicle certificate of
title.
(ii) Attach the owner's certificate of title to the application for a salvage
or scrap certificate of title or have the owner certify that the
certificate of title is lost.
(iii) On behalf of the owner, apply to the secretary of state for a salvage
or scrap certificate of title in the name of the owner. The owner shall
not sell or otherwise dispose of the vehicle without first receiving a
salvage or scrap certificate of title, which shall be assigned to the
buyer. An insurance company may assign a salvage or scrap
certificate of title only to an automotive recycler, used or secondhand vehicle parts dealer, foreign salvage vehicle dealer, or
vehicle scrap metal processor. back to top
What legal duties are imposed upon a lienholder following satisfaction
of the lien?
Pursuant to Michigan Vehicle Code 257.238(c):
(1) Whenever there is no outstanding obligation and no commitment
to make advances, incur obligations or otherwise give value, secured or to
be secured by a security interest in a vehicle, or an accessory thereon, for
which the certificate of title is in possession of a secured party, such
secured party shall, within 10 days after satisfaction of the obligation and,
in any event within 30 days, execute a termination statement in the form
prescribed by the department and mail or deliver the termination statement
to the owner or such other person as the owner may direct. The owner other
than a dealer holding the vehicle for resale, shall promptly cause the
certificate, all termination agreements, and an application for certificate of
title accompanied by the proper fee, to be mailed or delivered to the
department, which shall issue a new certificate.
(2) Whenever there is no outstanding obligation and no commitment
to make advances, incur obligations or otherwise give value, secured or to
be secured by a security interest in a vehicle, or an accessory thereon, for
which the certificate of title is in the possession of another person, the
secured party shall within 10 days after demand and in any event within 30
days, execute a termination statement in the form prescribed by the
department and mail or deliver the termination statement to the owner or
such other person as the owner may direct.
Pursuant to Michigan Vehicle Code § 257.239, it is a misdemeanor for any person
to fail or neglect to properly endorse and deliver a certificate of title to a transferee
or owner lawfully entitled thereto. back to top
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