What form of New Jersey title must an insurer obtain in connection
with the sale of a vehicle that has been acquired through the settlement of a
claim?
There are four different types of title available to insurers in connection with the
sale of a vehicle that has been acquired through the settlement of a claim:
Salvage Title
When a motor vehicle has been reported stolen or is damaged to such an extent
that it is “economically impractical to repair”, the vehicle must be sold on a
Salvage Title.
Salvage Title with an “FS” designation
When a motor vehicle is eight (8) or fewer model years old, and has suffered flood
damage and structural damage so as to be “economically impractical to repair”,
the vehicle must be sold on a Salvage Title with an “FS” designation.
Certificate of Title (aka “Standard Title”)
When the vehicle is a theft recovery, and the vehicle is not “economically
impractical to repair” and does not have a missing, damaged or altered VIN, the
vehicle may be sold on a Certificate of Title.
When the vehicle is not a theft recovery, a flood-damaged vehicle or a “classic”,
and the vehicle is older than eight (8) model years and had a New Jersey title prior
to the loss, the vehicle may be sold on a Certificate of Title.
Certificate of Title with an “F” designation
When the vehicle is not a theft recovery or a “classic”, and the vehicle is a flooddamaged vehicle, and is not “economically impractical to repair”, the vehicle may
be sold on a Certificate of Title with an “F” designation.
____________________________
“Economically impractical to repair” means that the motor vehicle is damaged to
such an extent that:
1. for those motor vehicles manufactured eight or less model years
from the current model year, the cost to repair such damaged motor vehicle,
as determined by a bona fide repair estimate, equals or exceeds the fair
market value of the motor vehicle immediately before it was damaged; OR
2. for those other motor vehicles where the fair market value of such
damaged motor vehicle immediately before it was damaged equals or
exceeds the fair market value of a motor vehicle of the same make and
model manufactured five years from the current model year, or similar
make and model if the same make and model is no longer manufactured, if
the motor vehicle has sustained damage to the extent that either:
i. The cost to repair such damaged motor vehicle, as determined
by a bona fide repair estimate, equals or exceeds the fair market value of
the motor vehicle immediately before it was damaged; or
ii. The insurer settles a total loss claim with the motor vehicle
owner as a result of the damage to the motor vehicle.
“Classic” means a vehicle 25 years or older.
[New Jersey Administrative Code 13:21-22.3; 21-22.4; 22.15] back to top
What documents must an insurer provide to Copart in order to sell a vehicle
on a Certificate of Title (aka “Standard 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 a DMV Cover Sheet and the
appropriate fee to the Division of Motor Vehicles for processing.
Thereafter, the Division of Motor Vehicles shall issue a Certificate of Title in the
name of the insurer. br />
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. back to top
What documents must an insurer provide to Copart in order to sell a vehicle
on a Salvage Certificate of Title (aka “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 a DMV Cover Sheet and the
appropriate fee to the Division of Motor Vehicles for processing.
Thereafter, the Division of Motor 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.
[New Jersey Administrative Code 13:21-22.3; 21-22.4; 22.15]
Insurance Company Unsuccessful in Getting Title from Owner/Policyholder
When the insurance company is unsuccessful in getting the NJ Title from the
owner/policyholder and has paid a claim for a total loss vehicle, the following
procedure applies:
The New Jersey Motor Vehicle Commission requires original notarized
correspondence on insurance company letterhead to include:
(1) a request that a NJ Salvage Title be issued in Insurance Company’s name
because claim was settled with the policyholder, vehicle is in the possession of the
insurance company or authorized salvage auction, but policyholder/owner did not
remit NJ title (attach proof of total loss settlement that includes policyholder
name, address and VIN).
(2) Statement settlement payment was not returned undeliverable or proof
payment was cashed.
(3) The following statement completed with insurance company name and the
VIN:
“As an authorized representative of the __ insurance company, I certify that this
company has legitimately obtained possession of the vehicle carrying VIN __ and
that the New Jersey Motor Vehicle Commission will bear no financial
responsibility for any errors or misrepresentations made by this company or
authorized representative(s) in regard to the possession and future sale of this
vehicle.”
(4) Copy of the letter sent to the owner from the insurance company/salvage
auction along with the copy of the certified mail receipt sent to the owner,
requesting NJ title be signed over to insurance company.
This policy does not apply to vehicles where the owner is not required to sign
vehicle over to insurance company but voluntarily sells to auction after claim has
been paid – the auction should not take the vehicle without the title.
This policy applies to vehicles with a NJ title history only.
(New Jersey Motor Vehicle Commission – Process for Salvage Title Issuance for a
Vehicle in Insurance Company’s Possession – Claim Paid to Owner - Veh8icle is
a Total Loss – Owner Has Not Complied with Official Request to Remit Title To
Insurance Company – Lien Satisfied as Applicable - Policy Effective June 1, 2004)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, a release of any liens, and a copy of
the police report.
After receipt of these documents, Copart will submit these documents along with a
DMV Cover Sheet and the appropriate fee to the Division of Motor Vehicles for
processing.
Thereafter, the Division of Motor Vehicles shall issue a 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 will be returned along
with an ACV, cost of repair, and police report to Copart by the insurer in order to
obtain the appropriate title depending upon the year and damage of the vehicle.
Copart, acting under a power of attorney for the insurer, will then sell the vehicle
at auction and reassign the insurer’s appropriate title document to the purchaser.
[New Jersey Administrative Code 13:21-22.15(b); New Jersey Statutes § 39:10-
32)] back to top
What steps must an insurer take in New Jersey to process an ownerretained vehicle?
What legal duties are imposed upon a lienholder following satisfaction
of the lien?
Pursuant to New Jersey Statutes § 39:10-10:
When the contract or terms of the security agreement noted on the certificate of
origin, or certificate of ownership have been performed the seller or secured party
shall deliver to the buyer the certificate of ownership thereto, executed as
provided in this chapter, with proper evidence of satisfaction of the contract or
termination of the security interest. Within 15 days after the performance of the
contract or termination of the security interest, the seller or secured party shall file
with the director a notice, in such form as the director shall prescribe, containing
evidence of such performance or termination. The director shall thereupon cause a
notation to be made on his records of certificate of ownership of the motor vehicle
that the contract has been satisfied or the security interest terminated. Any person
violating the provisions of this section shall pay a fine of $25.00. back to top
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