A vehicle deemed a total loss ("totaled") by an insurance company results in the issuance of a salvage title for the vehicle.  It becomes a "salvage vehicle" and CANNOT be driven on the highways or have a valid license plate.  It can be sold ("AS IS") to an automobile rebuilder to be used either for parts or to be restored ("rebuilt").  If restored, it must be inspected and ultimately a "rebuilt title" will be issued for the vehicle.  A rebuilt vehicle with a rebuilt title CAN be driven on the highways.

If a salvage vehicle is retained by the owner, the owner must: (1) obtain a rebuilder's license so that he/she can legally restore the vehicle; (2) restore/rebuild the salvage vehicle "to the condition that existed before" the damage that totaled it; and (3) have it inspected by the Department of Revenue Automobile Inspection Section to make sure that the salvage vehicle is completely restored and that it contains no stolen parts.  Under Alabama law, only an Alabama licensed rebuilder may apply for an inspection of a rebuilt vehicle. Additionally, the vehicle must be restored in Alabama and not in another state.

To apply for a rebuilder's license, contact the Alabama Department of Revenue License Tax Section, P.O. Box 327550, Montgomery, AL 36132-7550 - Telephone: (334) 353-7827. A license application with instructions can be obtained which explains the licensing requirements and fees.  Among other things, state law requires that a $10,000 surety bond be posted to become licensed as a rebuilder.  Also, it requires a blanket liability insurance policy.

Once the owner meets the rebuilder's license requirements, the following documents must be included with an application for a salvage vehicle inspection:

1.    INV 26-15 Form (Application for Inspection of a Salvage Vehicle)

2.    INV 31-1 Form (Remittance Advice)

3.    The original salvage title properly assigned to the owner (Licensed Rebuilder)

4.    Parts Bills-Of-Sale:

       a.  Notarized bills of sale of all major component parts (listing the manufacturer's vehicle identification number of the vehicle from which the parts were removed).

       b. Bills of sale of all minor component parts (notarization shall not be required).  If a minor component part contains or should contain the manufacturer's vehicle identification number, notarization is required.

5.    Copy of Rebuilder's License

6.    $90.00 Fee, payable by certified funds

       (Application fee of $75.00 plus title fee of $15.00)

The above listed documentation should be mail to: Department of Revenue Automobile Inspection Unit, P.O. Box 327641, Montgomery, Alabama 36132-7641 - Telephone (334) 242-3012.

Upon satisfactory completion of the inspection, a "rebuilt" identification plate will be permanently affixed to the vehicle and a "rebuilt title" will be issued.  Until then, the salvage vehicle cannot be used on the highways, except for repairs/restoration or to take it for the inspection.    

Alabama Law places certain requirements on having a salvage vehicle inspected.  Those requirements include, but are not limited to:

• The salvage vehicle must be restored, in Alabama, to the condition that existed prior to the event which caused the vehicle to be totaled.

• Must submit the outstanding salvage certificate of title with the application.

• Must have notarized bills of sale for all major component parts used in the restoration.

• Evidence that the owner is a licensed motor vehicle rebuilder as defined in Section 40-12-390 (copy of rebuilders license).

The owner shall also provide a written affirmation which states the following:

• The owner has rebuilt the vehicle or supervised its rebuilders and what has been done to restore the vehicle to its operating condition which existed prior to the event which caused the salvage title to issue.

• The owner personally inspected the completed vehicle and it complies with all safety requirements set forth by the State of Alabama and any regulations promulgated thereunder.

• The identification numbers of the restored vehicle and its parts have not, to the knowledge of the owner, been removed, destroyed, falsified, altered, or defaced.

• That the salvage certificate document attached to the application has not, to the knowledge of the owner, been forged, falsified, altered, or counterfeited.

• All information contained on the application and its attachments is true and correct to the knowledge of the owner,

Each application must be accompanied by an application fee of $75.00 and a title application fee of $15.00 for a total of $90.00 payable by certified funds made payable to the Alabama Department of Revenue.

Does an individual have to be a licensed rebuilder in order to apply for an inspection of their own vehicle which was acquired as part of an insurance claim? 

Yes.  Current law makes no exception for individuals with regard to the license requirement.  However, legislation has been introduced that may change that.

In lieu of obtaining a license, can an individual transfer ownership of their vehicle to a licensed rebuilder for the purpose of inspection?  See letter below from the Director of Investigations.

November 25, 2003

Mr. James R. Johnson, Deputy Commissioner

Alabama Department of Insurance P. O. Box 303351

Montgomery, AL 36130-3351

Re: Individually Owned Salvaged Vehicles

Dear Mr .Johnson:

Thank you for your fax/letter of November 17, 2003 regarding the problems of rebuilt salvaged vehicles, with particular concern about Mr. Jones. As referenced in your letter, the issues concern the ability of an individual to rebuild a salvage vehicle that he/she retained from a settlement when the vehicle was declared a total loss. My office is responsible for inspections of salvage vehicles that have been rebuilt in accordance with Section 32-8-87, Code of Alabama 1975. The owner must surrender the original title when the vehicle is declared a total loss. The statute presumes that a salvage title is issued to the insurance carrier and that the owner does not retain the vehicle. The statute also presumes that the insurance carrier will sell the salvage vehicle to a third party -usually an auto auction or a rebuilder/reconditioner who can either sell/use the vehicle for parts or possibly rebuild the vehicle for sale with a "rebuilt title." Indeed the statute does not contemplate the owner-retained salvage vehicle that can be rebuilt by the original owner. As you said, there are "practical difficulties" with an owner becoming a licensed rebuilder .

In my opinion, this statute is untenable and unfair to the owner who elects to retain his/her salvage vehicle. We have drafted legislation to correct this problem. It has failed to pass the Alabama Legislature on at least six attempts. It appears that however unfair you or I may consider this matter, the Legislature intends for this to be the law of Alabama. Only a licensed rebuilder can apply for an inspection according to the statutory requirements. Only the licensed rebuilder who actually owns the salvage vehicle can certify under oath as to what damage existed, what parts were replaced, and what repairs were made. Only the licensed rebuilder/owner, as shown by the title documents when compared with the bills of sale for the parts or work repair orders and other documentation regarding ownership at the time the repairs were made, can make the application with the consistency necessary to avoid an allegation of perjury or forgery. A defect or fraud in the process may leave the rebuilder/owner open to liability at a later time if the vehicle should be involved in an accident. That potential liability is of great significance to an insurer of the licensed rebuilder. Manipulation of the process to give only the appearance of compliance, such as temporarily transferring title to a licensed rebuilder solely for the purpose of getting an approved inspection, creates liability exposure and would likely require my staff to suborn perjury. It may also eventually undermine the responsibility of the insurer of the rebuilder in the event of a lawsuit after an accident -the very reason that the statute requires "garage" liability insurance to be obtained by a rebuilder licensee in the first place.

I am sworn to apply and enforce the law and the Constitution -even though I may disagree with the particular law vehemently. We have chosen to seek a change in the law in the Legislature in the manner contemplated by the Alabama Constitution for changes to be made. Mr. Jones has been advised as to all legitimate options to the best of my knowledge. We have declined to advise anyone of illegitimate options.

Sincerely,

Charles E. Crumbley, Director Investigations Division

Does an airbag (SRS), if deployed, have to be replaced?  

Yes.  An airbag is considered to be a part of the operating condition of the vehicle.  It must be replaced with an operable airbag in order to pass inspection.