Kentucky 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 Certificate of Title?
3. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Title?
4. 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?
5. What steps must an insurer take in Kentucky to process an owner-retained vehicle?
6. 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 vehicle that has been acquired through the settlement of a claim?
   
   Except as provided in KRS 186A.555, a salvage title shall be obtained by the owner of a motor vehicle that meets the following definition of a salvage vehicle: (a) A vehicle which has been wrecked, destroyed, or damaged, to the extent that the total estimated or actual cost of parts and labor to rebuild or reconstruct the vehicle to its preaccident condition and for legal operation on the roads or highways exceeds seventy-five percent (75%) of the retail value of the vehicle, as set forth in a current edition of the National Automobile Dealer's Association price guide.
   
   (b) The value of repair parts for purposes of this definition shall be determined by using the current published retail cost of the parts equal in kind and quality to the parts to be replaced or the actual retail cost of the repair parts used in repair.
   
   (c) The labor costs of repairs for purposes of this section shall be computed by using the hourly labor rate and time allocations which are reasonable and customary in the automobile repair industry in the community where the repairs are performed. [See Kentucky Revised Statutes § 186A.520(1)]
   
   The owner of a water damaged vehicle shall make application to the cabinet for a salvage certificate of title as provided for in KRS 186A.520. [See Kentucky Revised Statute § 186A.530(4)]
   
   “Water damage" means damage to a motor vehicle caused by submerging or partially submerging the vehicle in water to the extent that the vehicle was submerged or partially submerged at any water level above the dashboard of the vehicle, regardless of the actual dollar amount of the damage. [See Kentucky Revised Statute § 186A.510(7)]
   
   When an insurance company makes a claim settlement on a vehicle that has been stolen and recovered, if the vehicle meets the definition of a salvage vehicle as set out forth in KRS 186A.520, the company shall apply for a salvage certificate as provided for in KRS 186A.520. Upon receipt of this information, the cabinet shall issue the company a certificate of title to replace a salvage certificate of title. The cabinet shall promulgate administrative regulations pursuant to KRS Chapter 13A regarding the forms and any additional information which insurance companies shall be required to obtained and submit when seeking a certificate of title to replace a salvage certificate of title. [See Kentucky Revised Statute § 186A.530(6)(a)]
   
   If ownership of a motor vehicle has been transferred to an insurance company through payment of damages, the insurance company making the payment of damages shall be deemed the owner of the vehicle. [See Kentucky Revised Statute § 186A.530(3)] back to top
   
   
2. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Certificate of Title?
    
   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, an ACV, and a cost of repair. [Note: All delinquent taxes, by owner or seller, must be paid before registration/transfer. If insurer has any vehicle in it’s name with taxes/fees due, County Clerk will not process.]
   
   CarBuyerUSA will submit these documents along with an Application for Kentucky Certificate of Title/Registration and the appropriate fee to the Division of Motor Vehicle for processing.
   
   Thereafter, the Division of Motor Vehicle shall issue a Certificate of Title 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 Certificate of Title to the purchaser. [Kentucky Revised Statutes § 186A.520] back to top
   
   
3. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Title?
   
   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, an ACV, and a cost of repair.
   
   CarBuyerUSA will submit these documents along with an Application for Kentucky Certificate of Title/Registration, license plates, and the appropriate fee to the Division of Motor Vehicle for processing.
   
   Thereafter, the Division of Motor Vehicle shall issue a Salvage Title 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 Title to the purchaser. [Kentucky Revised Statutes § 186A.520] back to top
   
   
4. 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 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, and a release of any liens.
   
   After receipt of these documents, CarBuyerUSA will submit these documents along with an Application for Kentucky Certificate of Title/Registration and the appropriate fee to the Division of Motor Vehicle for processing.
   
   Thereafter, the Division of Motor Vehicle shall issue a Certificate of Title in the name of the insurer. Upon receipt, CarBuyerUSA will forward the Certificate of Title to the insurer for safekeeping.
   
   If the vehicle is recovered, the Certificate of Title along with an ACV and a cost of repair will be returned to CarBuyerUSA by the insurer in order to obtain the appropriate title depending upon the damage to the vehicle. If the vehicle is damaged to the extent that a Salvage Title is required, CarBuyerUSA will obtain one for the insurer prior to auctioning the vehicle.
   
   CarBuyerUSA, acting upon a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s appropriate Title to the purchaser. [Kentucky Revised Statutes § 186A.530] back to top
   
   
5. What steps must an insurer take in Kentucky to process an owner-retained vehicle?
   
   Pursuant to Kentucky Revised Statutes § 186A.530(6)(b):
   
   In claim settlements that do not involve transfer of the vehicle to the insurance company, an insurer shall not render payment on a damage claim for a vehicle whose damage meets or exceeds seventy-five percent (75%) of the value of the vehicle, until the insurer has received proof that the owner has surrendered the title or has applied for a salvage certificate of title as set forth in KRS 186A.520. The owner shall apply for a salvage certificate of title within three (3) working days of the agreed settlement. This subsection shall not apply to hail-damaged vehicles under KRS 186A.555. back to top
   
   
6. What legal duties are imposed upon a lienholder following satisfaction of the lien?
   
   Within one month after there is no obligation secured by the collateral covered by the financing statement or, if earlier, within twenty days after the secured party receives an authenticated demand from a debtor, the secured party shall deliver a termination statement to the county clerk of the county in which the title lien statement was submitted. The secured party shall also deliver a copy of the termination to the debtor or the debtor's transferee. Any person who violates the above provision shall be guilty of a violation. [Kentucky Revised Statutes §§ 186.045(1); 355.9-513; 186.990(1)] back to top
   
   
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