Tennessee 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 Certificate of Title branded “Flood Vehicle”?
4. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Certificate?
5. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Certificate branded “Water Damage”?
6. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on Non-Repairable Certificate?
7. 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?
8. What steps must an insurer take in Tennessee to process an owner-retained vehicle?
9. 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?
   
   (i) If an insurance company, pursuant to a damage settlement, acquires ownership of a passenger motor vehicle that has incurred damage requiring the vehicle to be titled as a salvage vehicle, nonrepairable vehicle, or flood vehicle, the insurance company either must notify the department electronically or on documents prescribed by the department for purposes of evidencing the insurance company in the ownership chain of title or, alternatively, must apply for a salvage title or nonrepairable vehicle certificate within fifteen (15) days after the title is properly assigned by the owner to the insurance company, and delivered to the insurance company with all liens released.
   
   (ii) Notwithstanding the provisions of this or any other law to the contrary, if an insurance company acquires ownership of a passenger motor vehicle under the circumstances described in this item and then sells such vehicle, then such transactions shall be exempt from sales and use tax liability to the same extent such transactions were exempt from such liability prior to October 1, 1996. If the vehicle does not meet or exceed the definition of a "salvage vehicle," "nonrepairable vehicle" or "flood vehicle," the insurance company is authorized to endorse change in ownership on the certificate of title as follows:(a ) With regard to a motor vehicle which is sold "as is" without repairs, change in ownership may be endorsed on the certificate of title without: (1 ) Obtaining a new certificate of title; or (2 ) Registering with the sales and use tax division; and(b ) With regard to a motor vehicle which is sold after repair, the insurance company must first obtain a certificate of title in its name, unless the transfer is to a licensed dealer or to the insured, in which cases the procedure set forth in subdivision (1) shall apply. [See Tennessee Code § 55-3-212 (b)(8)(B)] back to top
   
   The following definitions apply to the above legal citations:
   
   
   "Flood vehicle" means any passenger motor vehicle which has sustained substantial water damage as determined by departmental rules and regulations. Disclosure that a passenger motor vehicle has become a flood vehicle shall be made at the time of transfer of ownership, and the next certificate of title issued after such transfer shall be conspicuously labeled with the word "Flood" across the front;
   
   "Nonrepairable vehicle" means any passenger motor vehicle which is incapable of safe operation for use on roads or highways and which has no resale value except as a source of parts or scrap only or which the owner irreversibly designates as a source of parts or scrap. "Nonrepairable vehicle" includes, but is not limited to, any passenger motor vehicle which has sustained salt water damage as a result of salt water entering the passenger compartment. A nonrepairable vehicle shall be issued a nonrepairable vehicle certificate and shall never again be titled or registered;
   
   "Nonrepairable vehicle certificate" means a passenger motor vehicle ownership document issued by the state to the owner of a nonrepairable vehicle. Ownership of the passenger motor vehicle may only be transferred two (2) times on a nonrepairable vehicle certificate. A passenger motor vehicle for which a nonrepairable vehicle certificate has been issued can never be titled or registered for use on roads or highways. A nonrepairable vehicle certificate shall be conspicuously labeled with the word "Nonrepairable" across the front;
   
   "Passenger motor vehicle" means any vehicle driven or drawn by mechanical power manufactured primarily for use on the public streets, roads and highways that is ten (10) model years old or less, including a multipurpose passenger vehicle or light duty truck when that vehicle or truck is rated at not more than nine thousand pounds (9,000 lbs.) gross vehicle weight, except that "passenger motor vehicle" does not include a motorcycle;
   
   "Salvage title" means a passenger motor vehicle ownership document issued by the state to the owner of a salvage vehicle. Ownership of the passenger motor vehicle may be transferred on a salvage title; however, a passenger motor vehicle for which a salvage title has been issued shall not be registered for use on the roads or highways unless it has been issued a rebuilt title. A salvage title shall be conspicuously labeled with the word "Salvage" across the front;
   
   "Salvage vehicle" means any passenger motor 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 passenger motor vehicle to its pre-accident condition and for legal operation on the roads or highways exceeds seventy-five percent (75%) of the retail value of the passenger motor vehicle, as set forth in a current edition of any nationally recognized compilation (to include automated databases) of retail values. The value of repair parts for purposes of this subdivision shall be determined by using the current published retail cost of the repair parts to be used in the repair, or in the absence of a published retail cost the reasonable and customary cost in the community where repair parts are purchased. The labor cost of repairs for purposes of this subdivision shall be computed by using the hourly labor rate and time allocations that are reasonable and customary in the automobile repair industry in the community where the repairs are performed. "Salvage vehicle" also includes, without regard to whether such passenger motor vehicle meets the seventy-five percent (75%) threshold specified in the first sentence, any passenger motor vehicle whose owner may wish to designate as a salvage vehicle by obtaining a salvage title, without regard to the extent of the passenger motor vehicle's damage and repairs. Such designation by the owner shall not impose on the insurer of the passenger motor vehicle or on an insurer processing a claim made by or on behalf of the owner of the passenger motor vehicle any obligations or liabilities. [See Tennessee Code § 55-3-211]
   
   
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.
   
   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. [See Tennessee Code § 55-3-212] back to top
   
   
3. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Certificate of Title branded “Flood Vehicle”?
   
   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 Certificate of Title and Registration and the appropriate fee to the Title and Registration Division for processing.
   
   Thereafter, the Title and Registration Division shall issue a Certificate of Title branded “Flood Vehicle” 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 branded “Flood Vehicle” to the purchaser. [See Tennessee Code § 55-3-212]back to top
   
   
4. 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, an ACV, and a cost of repair.
   
   CarBuyerUSA will submit these documents along with an Application for Tennessee Salvage Certificate or Tennessee Nonrepairable Certificate and the appropriate fee to the Title and Registration Division for processing.
   
   Thereafter, the Title and Registration Division 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 Tennessee Code § 55-3-212] back to top
   
   
5. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Certificate branded “Water Damage”?
   
   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 Application for Tennessee Salvage Certificate or Tennessee Nonrepairable Certificate and the appropriate fee to the Title and Registration Division for processing.
   
   Thereafter, the Title and Registration Division shall issue a Salvage Certificate branded “Water Damage” 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 branded “Water Damage” to the purchaser. [See Tennessee Code § 55-3-212] back to top
   
   
6. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on Nonrepairable 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, an ACV, and a cost of repair.
   
   CarBuyerUSA will submit these documents along with an Application for Tennessee Salvage Certificate or Tennessee Nonrepairable Certificate and the appropriate fee to the Title and Registration Division for processing.
   
   Thereafter, the Title and Registration Division shall issue a Nonrepairable 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 Nonrepairable Certificate to the purchaser. [See Tennessee Code § 55-3-212] back to top
   
   
7. 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, and a release of any liens.
   
   After receipt of these documents, CarBuyerUSA will submit these documents along with an Application for Certificate of Title and Registration and the appropriate fee to the Title and Registration Division for processing.
   
   Thereafter, the Title and Registration Division shall issue a Certificate of Title in the insurer’s name. Upon receipt, CarBuyerUSA will forward this title to the insurer for safekeeping.
   
   If the vehicle is recovered, the 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 from the Title and Registration Division depending upon the year of the vehicle and the damage to the vehicle.
   
   CarBuyerUSA, acting upon a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s title to the purchaser. [See Tennessee Code § 55-3-212] back to top
   
   
8. What steps must an insurer take in Tennessee to process an owner-retained vehicle?
   
   Pursuant to Tennessee Code § 55-3-212:
   
   
   (C) If an insurance company does not assume ownership of its insured's passenger motor vehicle that has incurred damage requiring the vehicle to be titled as a salvage vehicle or nonrepairable vehicle, the insurance company shall:
   
   (i) Notify the insured of the insured's obligation to apply for a salvage title or nonrepairable vehicle certificate for the passenger motor vehicle and notify the state passenger motor vehicle titling office that a salvage title or nonrepairable vehicle certificate should be issued for the vehicle; or
   (ii) Withhold payment of the claim until the insured applies for a salvage title or nonrepairable vehicle certificate.
   
   (D) intentionally omitted
   (E) Any person acquiring ownership of a damaged passenger motor vehicle that meets the definition of a salvage or nonrepairable vehicle for which a salvage title or nonrepairable vehicle certificate has not been issued must apply for a salvage title or nonrepairable vehicle certificate, whichever is applicable. This application must be made before the vehicle is further transferred, but in any event, within thirty (30) days after ownership is acquired.
   
   
9. What legal duties are imposed upon a lienholder following satisfaction of the lien?
   
   Pursuant to Tennessee Code § 55-3-114(c), following satisfaction of lien, a notation shall be made on the certificate of title setting forth the fact that the lien or encumbrance has been discharged, and it shall be signed by the lienor. The lienor shall then deliver the certificate of title to the owner within seven (7) business days from the owner's request, unless the certificate of title shall show on its face one (1) or more liens or encumbrances still outstanding, in which event the certificate of title shall be delivered to the next prior lienor, either in person or by registered mail, and the lienor shall within seventy-two (72) hours notify the division of the discharge of such lien by registered mail with return receipt demanded.
   
   Pursuant to Tennessee Code § 55-3-127(b), it is a Class C misdemeanor for any lienor, including a mortgagee or a vendor, to fail or neglect upon the discharge of the lien, mortgage or encumbrance, to properly discharge the lien in the manner hereinabove provided and, if the certificate of title be in the lienor's possession, to fail to deliver the same to the person entitled to such certificate. back to top


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