Relating to applications for a motor vehicle salvage certificate of title by an insurer without surrendering the certificate of title or manufacturer’s or importer’s statement of origin, making penalties applicable, and including effective date provisions

Under current law, when a motor vehicle is sold or transferred, the vehicle’s certificate of title must be physically exchanged between the seller or transferor and the purchaser or transferee. Limited exceptions apply, including that an insurer is authorized to apply for and be issued a salvage certificate of title for a motor vehicle without surrendering the certificate of title or manufacturer’s or importer’s statement of origin properly assigned if (1) ownership of the vehicle was transferred, or will transfer, to the insurer pursuant to a settlement with the previous owner of the vehicle arising from circumstances involving damage to the vehicle, (2) at least days have expired since the effective date of such settlement, and (3) the application is accompanied by an affidavit from the insurer in which the insurer certifies it has made at least two written attempts to obtain a properly assigned certificate of title or statement of origin for the vehicle by contacting the previous owner of the vehicle and all lienholders of record by certified mail or a similar service, and has been unable to obtain the title or statement of origin. This bill authorizes an insurer to instead submit one or more supporting documents described in the bill, evidencing the transfer of ownership from the previous owner to the insurer if the motor vehicle is transferred pursuant to a settlement arising from circumstances involving damage or theft. Such supporting documents must be signed and affirmed under penalty of perjury if they are not notarized, and may be signed electronically in accordance with Code chapter 554D (electronic transactions). The insurer is required to indemnify and hold harmless the department of transportation for any claims resulting from issuing a salvage certificate of title pursuant to the bill. In accordance with current law, an application with supporting documents must also be accompanied by a $20 application fee and proof of payment of the total amount of the settlement by the insurer to the previous owner of the vehicle.52A.52, including as amended by the bill, commits a simple misdemeanor punishable by a $135 scheduled fine. By operation of law, any person who knowingly swears or affirms falsely to any matter or thing required under Code chapter 321 (motor vehicles and law of the road) to be sworn to or affirmed, including as required by the bill, is guilty of a class “D” felony. A class “D” felony is punishable by confinement for no more than five years and a fine of at least $1,025 but not more than $10,245. The bill takes effect January 1, 2026.