Voluntary Salvage Applications for Stolen and Hail Damaged Vehicles

Please review and distribute as appropriate.

During standard title examinations, the department has observed improper use of the Application for Salvage or Nonrepairable Vehicle Title (Form VTR-441) for stolen and hail damaged vehicles.

Texas Transportation Code, Section 501.091(15), defines a salvage motor vehicle as a motor vehicle that has damage to or is missing a major component part to the extent that the cost of repairs, including parts and labor other than the cost of materials and labor for repainting the motor vehicle and excluding sales tax on the total cost of repairs, exceeds the actual cash value of the motor vehicle immediately before the damage.

As a reminder, an insurance company may only voluntarily apply for a salvage vehicle title if the vehicle has sustained damage to a major component part, but does not meet the threshold where the cost of repairs exceeds the actual cash value of the motor vehicle prior to the damage or 100 percent actual cash value (ACV). A voluntary application cannot be submitted for damage solely to paint, hail damage, theft, or damage to non-major component parts.

Purchasers of salvage vehicles must undergo the rebuilt process that requires them to document repairs in accordance with Texas Transportation Code, Section 501.100, and pay a rebuilt fee on these vehicles. Therefore, voluntary applications for a stolen vehicle without damage or with damage to non-major component parts are not acceptable because an individual who subsequently obtains one of the vehicles is unable to comply with state law. Voluntary application can be made for a recovered stolen vehicle if it has sustained damage to a major component part, but does not meet the 100 percent ACV threshold. The application must indicate damage occurred as a result of the theft and not merely theft. Under no circumstances can an application for a salvage or nonrepairable title be made for an unrecovered theft.

Transportation Code, Section 501.091, specifically excludes sudden damage caused by hail from the term “damage” as it applies to salvage motor vehicles. As a result, a voluntary application solely for hail damage is not acceptable even if damage has occurred to a major component part.

Major component parts include:

• engine
• transmission
• frame
• fender
• hood
• door allowing entrance to or egress from the passenger compartment of the motor vehicle
• bumper
• quarter panel
• deck lid, tailgate, or hatchback
• cargo box of a one-ton or smaller truck, including a pickup truck
• cab of a truck
• body of a passenger motor vehicle
• roof or floor pan of a passenger motor vehicle, if separate from the body of the motor vehicle.

A salvage title will not be issued for a vehicle that has sustained damage solely to items such as an ignition switch, tires, radio, seats, etc.

Effective September 1, 2017, the department will begin a stringent effort to increase title examinations for improper salvage applications. Voluntary applications that indicate hail damage or do not indicate damage to the motor vehicle will be rejected.

Thank you,

Jeremiah Kuntz, Director
Vehicle Titles and Registration Division
Texas Department of Motor Vehicles

JK:MA

If you have any comments or suggestions concerning this VTR communication process, please contact your local TxDMV Regional Service Center.

 

Source: Insurance Industry
Voluntary Salvage Applications for Stolen and Hail Damaged Vehicles

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