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Texas State Title Processing Procedures

  1. What form of Texas title must an insurer obtain in connection with the sale of a vehicle that has been acquired through the settlement of a claim?
  2. What documents must an insurer provide to Copart in order to sell a vehicle on a Texas Certificate of Title (aka “Original Title”)?
  3. What documents must an insurer provide to Copart in order to sell a vehicle on a Texas Salvage Vehicle Title (purple)?
  4. What documents must an insurer provide to Copart in order to sell a vehicle on a Texas Nonrepairable Vehicle Title (orange)?
  5. What documents must an insurer provide to Copart in order to sell a vehicle on a Certificate of Authority [aka “Dismantler’s Permit” (orange)]?
  6. 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?
  7. What steps must an insurer take in Texas to process an owner-retained vehicle?
  8. What legal duties are imposed upon a lienholder following satisfaction of the lien?

  1. What form of Texas 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 primary documents to evidence ownership of a vehicle in Texas:

    Texas Certificate of Title (blue): A Certificate of Title may be obtained on a vehicle that does not meet the definitions of “salvage motor vehicle” or “nonrepairable motor vehicle” as set forth below. Insurers may sell total loss vehicles that qualify to be sold on a Certificate of Title by reassigning the owner’s title to the purchaser. It is not necessary to transfer into the insurer’s name prior to sale a total loss vehicle that can be sold on a Certificate of Title.

    Texas Nonrepairable Vehicle Title (orange): A Nonrepairable Vehicle Title must be obtained on a vehicle that meets the definition for “nonrepairable motor vehicle” as set forth in Texas Transportation Code § 501.091(9):

      "Nonrepairable motor vehicle" means a motor vehicle that: (A) is damaged, wrecked, or burned to the extent that the only residual value of the vehicle is as a source of parts or scrap metal; or (B) comes into this state under a title or other ownership document that indicates that the vehicle is nonrepairable, junked, or for parts or dismantling only.

    Texas Salvage Vehicle Title (purple): A Texas Salvage Vehicle Title must be obtained on a vehicle that meets the definition for "salvage motor vehicle" as set forth in Texas Transportation Code § 501.091(15):

      "Salvage motor vehicle":

        (A) means a motor vehicle that:

          (i) 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; or

          (ii) is damaged and that comes into this state under an out-of-state salvage motor vehicle certificate of title or similar out-of-state ownership document that states on its face "accident damage," "flood damage," "inoperable," "rebuildable," "salvageable," or similar notation; and

        (B) does not include an out-of-state motor vehicle with a "rebuilt," "prior salvage," "salvaged," or similar notation, a nonrepairable motor vehicle, or a motor vehicle for which an insurance company has paid a claim for:

          (i) the cost of repairing hail damage; or

          (ii) theft, unless the motor vehicle was damaged during the theft and before recovery to the extent described by Paragraph (A)(i).

    Certificate of Authority [aka “Dismantler’s Permit” (pink)]: A Certificate of Authority is optional for any vehicle meeting the statutory requirements set forth below:

      Texas Transportation Code § 683.051. Application for Authorization to Dispose of Certain Motor Vehicles

      A person may apply to the department for authority:

      1. to sell, give away, or dispose of a motor vehicle to a motor vehicle demolisher if:
        1. (A) the person owns the motor vehicle and the certificate of title to the vehicle is lost, destroyed, or faulty; or

          (B) the vehicle is an abandoned motor vehicle and is:

            (i) in the possession of the person; or

        (ii) located on property owned by the person; or

      2. to dispose of a motor vehicle to a motor vehicle demolisher for demolition, wrecking, or dismantling if:
        1. (A) the abandoned motor vehicle:

            (i) is in the possession of the person;

            (ii) is more than eight years old;

            (iii) either has no motor or is otherwise totally inoperable or does not comply with all applicable air pollution emissions control related requirements included in: (aa) the vehicle inspection requirements under Chapter 548, as evidenced by a current inspection certificate affixed to the vehicle windshield; or (bb) the vehicle emissions inspection and maintenance requirements contained in the Public Safety Commission's motor vehicle emissions inspection and maintenance program under Subchapter F, Chapter 548, or the state's air quality state implementation plan; and

            (iv) was authorized to be towed by a law enforcement agency; and

          (B) the law enforcement agency approves the application.

          A Certificate of Authority (“Dismantler’s Permit”) should be used as a last resort if a negotiable title cannot be obtained from the owner of the vehicle. Only vehicles with a Texas title qualify for a Certificate of Authority. A Certificate of Authority is a “parts only” vehicle and cannot be reregistered.

          [Texas Transportation Code Section 501.091; 501.092; 501.093; 683.051; 683.054]

    Out-of-State Evidence Requirements: The Texas Department of Transportation, Vehicle Titles and Registration Division, will issue a Salvage Vehicle Title, Nonrepairable Vehicle Title, or Certificate of Authority to Demolish only for a vehicle that has a direct connection to Texas if out-of-state evidence of ownership is surrendered. This includes vehicles that are:

    1. Registered under Texas Registration Purposes Only (RPO) procedures
    2. Titled out-of-state but damaged in Texas
    3. Titled out-of-state, but stolen in Texas
    4. Titled out-of-state, but recovery of the stolen vehicle (theft recovery) occurred in Texas
    5. Titled out-of-state, but the owner resides in Texas (i.e. the owner is a resident of another state, but is active duty military stationed in Texas or is a full-time student attending an accredited Texas college or university).

    Acceptable Evidence needed for out-of-state vehicles:

    If the vehicle is not titled or registered in Texas, any of the following documents are acceptable to verify a direct connection to Texas:

    • A Statement of Fact for Out-of-state Evidence for a Salvage or Nonrepairable Vehicle, Form VTR-221, completed by an employee of the insurance company.

    • Note: VTR encourages use of the Form VTR-221. Use of the form significantly lessens the time involved in the examination process for salvage transactions.

    • A copy of an accident, theft, or theft recovery report, whichever applies.

    • A Statement of Fact on insurance company letterhead, signed by an employee of the insurance company, such as an agent or adjuster. The statement must include the following (select options that apply for each transaction):

      "(Insurance company name) is licensed to do business in Texas, and has acquired the (year and make), (vehicle identification number) through payment of a claim, ownership, or possession." And, either:

      "The vehicle was (damaged, stolen or recovered) in Texas and the (loss, theft, or recovery) location was (provide address or city & state, at a minimum)." or "The vehicle owner is a Texas resident whose Texas address is (provide owner's Texas address)."

    • An adjusters claim report that identifies the insurance company paying the claim, describes the vehicle (at a minimum, the vehicle identification number must be included) and indicates the loss location (where the vehicle was damaged, stolen or recovered).
    • An insurance company generated loss or claim report that includes the name of the insurance company paying the claim, the vehicle description (at a minimum, the vehicle identification number must be included), and the loss location (where the vehicle was damaged, stolen or recovered).

    Note: A regular (non-salvage) title, stamped with "FLOOD," "SALVAGE," "DAMAGED" or a similar notation will not be accepted when applying for a Texas Salvage or Nonrepairable Vehicle Title, or a Texas Rebuilt Salvage Title, unless stamping a title to denote the salvage status of the vehicle is the normal policy or procedure in the jurisdiction that issued the title. If stamping a title is not the normal policy or procedure and there is no direct connection to Texas, a salvage ownership document must be obtained from the appropriate jurisdiction.

    [Texas Department of Transportation 12/22/05 Letter re Out-Of-Sate Requests For Texas Salvage Documents] back to top

  2. What documents must an insurer provide to Copart in order to sell a vehicle on a Texas Certificate of Title [aka “Original Title” (blue)]?

    Pursuant to Transportation Code Section 501.092(d): If the motor vehicle is not a salvage motor vehicle title or a nonrepairable vehicle, the insurance company is not required to surrender the regular certificate of title for the vehicle or to be issued a salvage vehicle title or a nonrepairable vehicle title for the motor vehicle.

    The insurer shall provide Copart with a Texas 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), an odometer disclosure statement, and a release of any liens. The insurer shall also provide Copart with figures showing that the estimated cost of repairs other than repairs related to hail damage but including parts and labor is less than 100% of the actual cash value of the vehicle in its predamage condition.

    Copart, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the owner’s Certificate of Title to the purchaser.

    [Texas Transportation Code Section 501.092, 501.093] back to top

  3. What documents must an insurer provide to Copart in order to sell a vehicle on a Texas Salvage Vehicle Title (purple)?

    The insurer shall provide Copart with a Texas 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), an odometer disclosure statement, and a release of any liens. The insurer shall also provide Copart with figures showing that the cost of repair exceeds the actual cash value of the motor vehicle immediately before the damage. The insurer may voluntarily request a Texas Salvage Vehicle Title if the vehicle does not meet the definition of a Salvage Vehicle.

    Copart will forward these documents, along with the appropriate fees, and an Application for Texas Salvage Vehicle Title (VTR-441) filled out by Copart, as the insurer’s agent, to the Texas Department of Transportation for processing. Thereafter, the Texas Department of Transportation will issue a Salvage Vehicle 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 Vehicle Title to the purchaser.

    [Texas Transportation Code Section 501.092; Texas Administrative Code Title 43, § 17.67] back to top

  4. What documents must an insurer provide to Copart in order to sell a vehicle on a Texas Nonrepairable Vehicle Title (orange)?

    The insurer shall provide Copart with a Texas 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), an odometer disclosure statement, and a release of any liens. The insurer may voluntarily request a Texas Nonrepairable Vehicle Title if the vehicle does not meet the definition of a Nonrepairable Vehicle.

    Copart will forward these documents, along with an Application for Texas Nonrepairable Vehicle Title (VTR-441) filled out by Copart as the insurer’s agent, will be forwarded to the Texas Department of Transportation for processing. Thereafter, the Texas Department of Transportation will issue a Nonrepairable Vehicle 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 Nonrepairable Vehicle Title to the purchaser.

    [Texas Transportation Code Section 501.092; Texas Administrative Code Title 43, § 17.67] back to top

  5. What documents must an insurer provide to Copart in order to sell a vehicle on a Certificate of Authority [aka “Dismantler’s Permit” (pink)]?

    The insurer must provide Copart with a Texas Certificate of Title either endorsed over to the insurer by insured or endorsed by insurer accompanied by a power of attorney from insured to insurer (vehicles with out-of-state titles do not qualify for a Certificate of Authority), OR copies of the front and back of the settlement check that was paid by the insurer to the vehicle’s owner (the back of the check must show the owner’s endorsement), along with a lien release and odometer disclosure statement.

    Copart will forward these documents, along with the appropriate fees and an Application for Certificate of Authority filled out by Copart as the insurer’s agent, to the Texas Department of Transportation for processing.

    Thereafter, the Texas Department of Transportation will issue a Certificate of Authority 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 Authority to the purchaser.

    [Texas Transportation Code Section 683.051; 683.054] back to top

  6. What documents must an insurer provide to Copart in order to sell a recovered theft vehicle recovered substantially intact with no substantial damages, where title is still in the name of the insured?

    The insurer shall provide Copart with a Texas Certificate of Title or a comparable ownership documented 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), along with an odometer disclosure statement, a release of any liens, and a repair estimate. Upon receipt, Copart will contact the insurer for instructions on what title type to obtain on the vehicle.

    Following receipt of instructions from the insurer and the documents listed above, Copart will forward these documents, along with the appropriate fees and an application for one of the title types the instructions specify and in accordance with state titling guidelines previously listed.

    Thereafter, the Texas Department of Transportation will issue the appropriate 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 title to the purchaser.

    [Texas Transportation Code 501.091(15)(B)] back to top

  7. What steps must an insurer take in Texas to process an owner-retained vehicle?

    Pursuant to Texas Transportation Code Section 501.093:

      (a) If an insurance company pays claim on a nonrepairable motor vehicle or salvage motor vehicle and the insurance company does not acquire ownership of the motor vehicle, the insurance company shall submit to the department, before the 31st day after the date of the payment of the claim, on the form prescribed by the department, a report stating that the insurance company:

        (1) has paid a claim on the motor vehicle; and

        (2) has not acquired ownership of the motor vehicle.

      (b) The owner of a motor vehicle to which this section applies may not operate or permit operation of the motor vehicle on a public highway or transfer ownership of the motor vehicle by sale or otherwise unless the department has issued a salvage vehicle title or a nonrepairable vehicle title for the motor vehicle or a comparable ownership document has been issued by another state or jurisdiction for the motor vehicle.

      (c) Subsection (b) does not apply if:

        (1) the department has issued a nonrepairable vehicle title or salvage vehicle title for the motor vehicle; or

        (2) another state or jurisdiction has issued a comparable out-of-state ownership document for the motor vehicle.

        Pursuant to Texas Department of Transportation Registration and Title Bulletin #047-04:

    When an insurance company pays a claim on a salvage or nonrepairable motor vehicle, and the owner retains the motor vehicle as part of the claim settlement, the insurance company is required to submit a Form VTR-436, Owner Retained Report, to the department within 31 days from the date of claim payment.
    • Owner retained provisions apply only to motor vehicles that are damaged and the amount of damage is sufficient to classify the motor vehicle as a salvage or nonrepairable motor vehicle (i.e., cost of repairs is in excess of the predamaged actual cash value or over 100%).
    • Insurance companies may not voluntarily submit a Form VTR-436, Owner Retained Report, for motor vehicles that have sustained a lesser amount of damage (100% or less).
    • The costs for repairing hail damage or repairing damage solely to the exterior paint of the vehicle should not be included when calculating the cost of repairs.back to top

  8. What legal duties are imposed upon a lienholder following satisfaction of the lien?

    Pursuant to Texas Transportation Code Section 501.115:

      (a) When a debt or claim secured by a lien has been satisfied, the lienholder shall, within a reasonable time not to exceed the maximum time allowed by Section 348.408, Finance Code, execute and deliver to the owner, or the owner's designee, a discharge of the lien on a form prescribed by the department.

      (b) The owner may present the discharge and certificate of title to the county assessor-collector with an application for a new certificate of title and the department shall issue a new certificate of title.

    Pursuant to Texas Transportation Code Section 348.408(b):

      (b) If the retail buyer or the buyer's designee tenders to the holder as payment in full an amount derived from that outstanding balance information, the holder shall:

        (1) accept the amount as payment in full; and

        (2) release the holder's lien against the motor vehicle within a reasonable time not later than the 10th day after the date on which the amount is tendered.

    Pursuant to Texas Transportation Code Section 501.157(a):

      Unless otherwise provided by this chapter, an offense under this chapter is a misdemeanor punishable by a fine of not less than $1 or more than $100 for the first offense. If a person is subsequently convicted of the same offense, at the jury's discretion, a person may be fined not less than $2 or more than $200. back to top

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