Illinois State Title Processing Procedures

1. 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?
2. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Certificate of Title (aka “Salvage Title”)?
3. What documents must an insurer provide to CarBuyerUSA 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?
4. What steps must an insurer take in Illinois to process an owner-retained vehicle?
5. What legal duties are imposed upon a lienholder following satisfaction of the lien?

1. What form of title must an insurer obtain in connection with the sale of a total loss vehicle?
   
   When an insurance company makes a payment of damages on a total loss claim for a vehicle, the insurance company shall be deemed to be the owner of such vehicle and the vehicle shall be considered to be salvage except that ownership of a vehicle 9 model years of age or older may, by agreement between the registered owner and the insurance company, be retained by the registered owner of such vehicle. The insurance company (or CarBuyerUSA, acting as agent for the insurer under a power of attorney) shall promptly deliver or mail within 20 days the certificate of title along with proper application and fee to the Secretary of State, and a salvage certificate shall be issued in the name of the insurance company. [See 625 Illinois Compiled Statutes 5/3 – 117.1(b)(1)]
   
   An insurer making payment of damages on a total loss claim for the theft of a vehicle may exchange the salvage certificate for a certificate of title if the vehicle is recovered without damage. In such a situation, the insurer shall fill out and sign a form prescribed by the Secretary of State which contains an affirmation under penalty of perjury that the vehicle was recovered without damage and the Secretary of State may, by rule or regulation, require photographs to be submitted. [See 625 Illinois Compiled Statutes 5/3-117.1(b)(1)] back to top
   
   
2. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Certificate?
   
   The insurer shall provide CarBuyerUSA 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. Please note that Illinois has detailed and complex requirements regarding powers of attorney. Please consult your CarBuyerUSA facility in Illinois for guidance on using the appropriate power of attorney for your situation.
   
   CarBuyerUSA will submit these documents along with an Application for Vehicle Title – Salvage Certificate and the appropriate fee to the Secretary of State for processing.
   
   Thereafter, the Secretary of State shall issue a Salvage Certificate in the name of the insurer.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Salvage Certificate to the purchaser. [See 625 Illinois Compiled Statutes 5/3-117.1(b)(1), 5/3-118] back to top
   
   
3. What documents must an insurer provide to CarBuyerUSA 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 CarBuyerUSA 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 with last known mileage, a release of any liens, and an ACV. Please note that Illinois has detailed and complex requirements regarding powers of attorney. Please consult your CarBuyerUSA facility in Illinois for guidance on using the appropriate power of attorney for your situation.
   
   After receipt of these documents, CarBuyerUSA will submit these documents along with an Application for Vehicle Title – Salvage Certificate and the appropriate fee to the Secretary of State for processing.
   
   Thereafter, the Secretary of State shall issue a Salvage Certificate in the name of the insurer. Upon receipt, CarBuyerUSA will forward the Salvage Certificate to the insurer for safekeeping. 
   
   If the vehicle is recovered, the Salvage Certificate along with an ACV, a cost of repair, and a police report will be returned to CarBuyerUSA by the insurer in order to obtain the appropriate title depending whether the vehicle is damaged or not. If the vehicle is recovered without damage, the Salvage Certificate may be exchanged for a Certificate of Title. In such a situation, the insurer shall provide a letter and a police report which states that the vehicle was recovered without damage, and the Secretary of State may, by rule or regulation, require photographs to be submitted. If the vehicle is recovered with damage, the vehicle will remain on a Salvage Certificate. CarBuyerUSA, acting upon a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Salvage Certificate or Certificate of Title to the purchaser. [See 625 Illinois Compiled Statutes 5/3-117.1(b)(1), 5/3-118] back to top
   
   
4. What steps must an insurer take in Illinois to process an ownerretained vehicle?
   
   Pursuant to 625 Illinois Compiled Statutes 5/3-117.1(b)(1):
   
   
   (b) An application for a salvage certificate shall be submitted to the Secretary of State in any of the following situations: (1) When an insurance company makes a payment of damages on a total loss claim for a vehicle, the insurance company shall be deemed to be the owner of such vehicle and the vehicle shall be considered to be salvage except that ownership of a vehicle 9 model years of age or older may, by agreement between the registered owner and the insurance company, be retained by the registered owner of such vehicle. The insurance company shall promptly deliver or mail within 20 days the certificate of title along with proper application and fee to the Secretary of State, and a salvage certificate shall be issued in the name of the insurance company. An insurer making payment of damages on a total loss claim for the theft of a vehicle may exchange the salvage certificate for a certificate of title if the vehicle is recovered without damage. In such a situation, the insurer shall fill out and sign a form prescribed by the Secretary of State which contains an affirmation under penalty of perjury that the vehicle was recovered without damage and the Secretary of State may, by rule or regulation, require photographs to be submitted. back to top
5. What legal duties are imposed upon a lienholder following satisfaction of the lien?
   
   Following satisfaction of lien, the lienholder must, within ten (10) days after demand and, in any event within thirty (30) days, execute a release of his security interest, and mail or deliver the Certificate of Title and release to the next lienholder named therein, or, if none, to the owner or any person who delivers to the lienholder an authorization from the owner to receive the Certificate of Title. [See 625 Illinois Compiled Statutes 5/3-205(a)  back to top
   
   
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