KRS 186A.530: Titles of rebuilt, water -damaged, and junk vehicles -- Insurance claim

settlements for salvage vehicles -- Disclosure of title brand by owner or dealer -

- Voidability of sale without disclosure -- Exemption -- Administrative

regulations.

(1) The owner of a motor vehicle that meets the definition of a salvage vehicle as set

forth in KRS 186A.520(1) and has been issued a salvage certificate of title in

Kentucky, or the equivalent thereof by another licensing jurisdiction, and has been

rebuilt, may make application for a new certificate of title pursuant to KRS

186.115. The Transportation Cabinet may promulgate administrative regulations

pursuant to KRS Chapter 13A governing the form of application.

(2) Upon receipt of a salvage certificate o f title issued pursuant to KRS 186A.520, or

similar title issued by another state if the title does not disqualify the vehicle from

being titled for use on the highway in that state, and proof of passing the inspection

required by KRS 186A.115, the cabinet shall issue a new certificate of title with the

words "rebuilt vehicle" printed on the face of the title. The brand shall be carried

forward and printed in the appropriate section on the face of all titles issued

thereafter for that motor vehicle.

(3) 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.

(4) The owner of a water damaged vehicle shall make applicat ion to the cabinet for a

salvage certificate of title as provided for in KRS 186A.520. The owner of a vehicle

with a brand from another jurisdiction identifying the vehicle as water damaged or

other similar designation who is making application for a Kentu cky title shall be

issued a title with the words "water damaged" printed on the face of the title.

(5) A Kentucky salvage certificate of title may be issued from an out -of-state junking

certificate or other ownership document bearing a designation of "junk ,"

"unrebuildable," or other similar classification that disqualifies the vehicle from

being titled for use on the highway in that state with the following provisions:

(a) The out-of-state junking certificate of title or other ownership certificate shall

be an original, secure document;

(b) The applicant shall submit a minimum of two (2) photographs of the motor

vehicle showing the damage to the motor vehicle. The photographs shall be

included in the application for a salvage certificate of title;

(c) The a pplicant shall submit a minimum of two (2) estimates of damage

verifying that the condition of the vehicle which has been issued the junking

certificate constitutes less than seventy -five percent (75%) of the retail value

of the vehicle, as prescribed by a nationally accepted used car valuation guide

or tool identified under KRS 304.20-110; and

(d) A salvage title issued under this subsection shall be branded "SALVAGE."

The Transportation Cabinet shall use a unique method of identification to

differentiate a salvage title issued under this subsection from other salvage

titles.

(6) (a) Upon receipt of a salvage certificate of title issued pursuant to subsection (5)

of this section, or an out -of-state junking certificate or other ownership

document bearing a d esignation of "junk," "unrebuildable," or other similar

classification that disqualifies the vehicle from being titled for use on the

highway in that state, and proof of passing the inspection required by KRS

186A.115, the cabinet shall issue a new certifi cate of title with the words

"REBUILT VEHICLE" printed on the face of the title. The Transportation

Cabinet shall use a unique method of identification to differentiate a rebuilt

brand issued under this paragraph from other rebuilt brands. The brand shall

be carried forward and printed in the appropriate section on the face of all

titles issued thereafter for that motor vehicle.

(b) A person who obtains a rebuilt title under this subsection shall permanently

affix a plate of metallic composition within the opening for the driver's side

door which states "REBUILT VEHICLE - May Not Be Eligible For Title In

All States."

(7) (a) When an i nsurance 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 forth in KRS 186A.520, the company shall apply for a salvage

certificate of title 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 an d any

additional information which insurance companies shall be required to obtain

and submit when seeking a certificate of title to replace a salvage certificate of

title.

(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 appli ed 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.

(c) An insurance company shall not refuse coverage to, and shall not reclassify

coverage of, a vehicle that has been issued a rebuilt title pursuant to the

provisions of this section.

(8) A motor vehicle owner or a motor vehicle dealer licensed in this s tate who offers

for sale, trade, or transfer a motor vehicle which carries a title brand, as set forth in

subsection (2) or (6) of this section, shall disclose the nature of the brand to any

prospective buyer or transferee, prior to the sale, and according to the following:

(a) Dealer disclosure shall be located on a sticker placed on the vehicle. The

sticker wording shall be printed in at least ten (10) point, bold face type, on a

background of obviously different color, and shall include the following:

"THIS IS A REBUILT VEHICLE." This disclosure information shall not

appear on vehicles that do not have a branded title. Dealer disclosure shall

also be located on a buyer's notification form to be approved by the

Transportation Cabinet. The form shall inform the buyer that the vehicle is a

rebuilt vehicle and may include any other information the cabinet deems

necessary; and

(b) Nondealer disclosure shall be made in accordance with the procedures

provided for in KRS 186A.060. The Department of Vehicle Regulat ion shall

ensure that disclosure information appears near the beginning of the

application for title and informs the buyer that the vehicle is a rebuilt vehicle.

(9) Failure of a dealer to procure the buyer's acknowledgment signature on the buyer's

notification form or failure of any person other than a dealer to procure the buyer's

acknowledgment signature on the vehicle transaction record form shall render the

sale voidable at the election of the buyer. The election to render the sale voidable

shall be li mited to forty -five (45) days after issuance of the title. This provision

shall not bar any other remedies otherwise available to the purchaser.

(10) The notification provisions of this section shall not apply to motor vehicles more

than ten (10) model years old.

(11) A manufacturer licensed under KRS Chapter 190 shall not prohibit or restrict the

installation of vehicle software on a vehicle that has been issued a rebuilt title under

this section.

(12) The Transportation Cabinet shall promulgate administra tive regulations pursuant to

KRS Chapter 13A, regarding the administration of the title branding procedure. The

administrative regulations shall include the manner in which salvage titles and

rebuilt brands on vehicles previously declared unrebuildable by another state are

differentiated from other salvage titles and rebuilt brands. The administrative

regulations may include designation of additional brands which provide significant

information to the owner.