MAY 2009

Salvage companies must report to national database

Now, federal rules require all insurance carriers, auto recyclers, salvage yards, and junk yards to report total loss and salvage vehicle data to the National Motor Vehicle Title Information System (NMVTIS).

The rules also apply to any entities that handle, control, own, or acquire salvage vehicles, such as salvage pools, salvage auctions, pull or pick- apart yards, scrap-vehicle shredders, scrap-metal processors, and crushers.

The rules require that salvage companies report, at minimum, every thirty days. However, the Department of Justice strongly recommends that insurance carriers report within 24 hours to help maintain the accuracy of NMVTIS.

NMVTIS contains title, odometer, and brand information (such as “flood” or “rebuilt”) which is maintained even when a vehicle changes title from one state to another. Without a nation-wide program of this kind, criminals can re-title a damaged vehicle in another state with no record of the damage or replace a clean-title junk vehicle with a stolen car of similar make and model. By making these fraudulent activities more difficult if not impossible, NMVTIS can help keep unsafe vehicles off the road and prevent criminal activity.

Currently, insurers and salvage companies must report their data through a third-party provider such as Auto Data Direct, Inc. (ADD), which allows electronic reporting via its website at ADD has developed innovative “back-end” tools that allow batch reporting for high-volume companies but also accommodate smaller operations with fewer vehicles to report.