Total Loss Salvage and Nonrepairable Vehicle Retentions

California Vehicle Code (CVC) Section 11515 (b) and 11515.2 (b) requires insurance companies to notify the Department of Motor Vehicles (Department) on a form prescribed by the Department, any time an owner retains possession of a total loss salvage or nonrepairable vehicle.

The Department has experienced a significant increase of nonrepairable retentions and complaints from customers that their vehicles were erroneously reported as nonrepairable retentions. Apparently, there appears to be a misunderstanding of the terms "total loss salvage" and "nonrepairable" and confusion when using the prescribed form. CVC defines salvage and nonrepairable vehicles as follows:

CVC Section 544 defines, in part, a total loss vehicle as a vehicle that has been wrecked, destroyed, or damaged, to such an extent the insurance company considers it uneconomical to make repairs to the vehicle and the vehicle is not repaired by or for the person who owned the vehicle when the damage occurred.

CVC Section 431 defines a nonrepairable vehicle as a vehicle that the owner designates has little or no resale value other than its worth as scrap metal or as a source of a vehicle identification number that could be used illegally and: 1) has no resale value except as a source of parts, 2) completely stripped vehicle (a surgical strip) recovered from theft, missing all of the bolt on sheet metal body panels, all of the doors and hatches, substantially all of the interior components, and substantially all of the grill and light assemblies or 3) completely burned vehicle (burned hulk) that has been burned to the extent that there are no more usable or repairable body or interior components, tires and wheels, or drive train components.

A vehicle declared nonrepairable may not be titled or registered for use on the roads or highways (CVC 6050).

To avoid further confusion, the Department has developed two new retention forms (attached): one for reporting retention of total loss salvages, the Salvage Vehicle Notice of Retention by Owner (REG 481); and another for nonrepairable vehicles, the Non-Repairable Vehicle Notice of Retention by Owner (REG 480). Please distribute these forms with instructions for immediate use.

The new forms will improve efficiency in the Department's operation of the registration program and minimize the erroneously reporting of nonrepairable retentions.

Additionally, the Department wishes to remind the insurance companies of their requirement to also notify the insured or owner of the insured's or owner's responsibility to comply with CVC Section 11515 (b).