Does Your Insurance Software Manage NVMTIS Compliance?

NVMTIS-compliance

If you’ve never heard of NVMTIS, you’re not alone. Many insurers don’t know about the reporting requirement that’s been written into law for this. Of course, that doesn’t mean they don’t need to.

The National Motor Vehicle Title Information System is an electronic filing system, managed by the Department of Justice, that stores data about a vehicle’s condition and history. Its purpose is to prevent salvaged vehicles from being resold without a title indicating that fact. The law was passed after Hurricane Katrina to protect consumers from another wave of what amounts to fraud:

“After Hurricane Katrina, authorities reported truckloads of flooded vehicles being taken out of Louisiana to other states as far away as the upper Midwest, where they were dried out, cleaned, and readied for sale to unsuspecting consumers in states that do not brand flood vehicles. Prospective purchasers of these vehicles may not have known that the vehicles had been subjected to a saltwater flood that made the vehicles’ electrical systems (including their airbag sensors) more prone to failure. NMVTIS is designed to prevent vehicle histories such as these from being “washed” or concealed because it is designed to serve as a national repository of vehicle brand information. Fully implemented, NMVTIS will have data from every state and will be queried before any state issues a vehicle a new title, making it extremely difficult (if not impossible) to wash a “flood” designation from a vehicle.’ ~ www.vehiclehistory.gov

Car-shoppers can use the database to look up a vehicle’s title, odometer reading and historical theft data (if any) before they buy. They can also use it to research the vehicle’s brand history. In this instance, “brand” doesn’t refer to the manufacturer, but to the vehicle’s condition status: for example, “junk,” “salvage,” “flood” and so on.

Who provides the data that goes into the system?

The NMVTIS gets its information from many different sources: titling agencies, junk yards, vehicle recyclers and – today’s salient point – insurers too. At least, it’s supposed to. As we mentioned above, many insurers don’t know they’re required to report.

What are the reporting requirements for insurers?

“Insurance companies and certain self-insurers must report monthly to NMVTIS on the junk and salvage automobiles they obtain,” said the NMVTIS website.

The definition of salvage includes any vehicle considered a total loss. If damages from a collision, fire, flood, accident, trespass or other event would cost more to repair than the fair market value of the vehicle, the insurer must inform the NMVTIS of the:

  • Vehicle identification number (VIN)
  • Date obtained or designated as junk or salvage
  • Name of previous owner
  • Name of entity in possession of the vehicle when it was designated junk or salvage
  • Name of owner (either individual or insurer) at the time the report is filed

Ignorantia juris non excusa (Latin for “ignorance of the law excuses not”)

There’s a non-compliance penalty for those that are required to report to the NMVTIS, to the tune of $1 thousand per violation. “For example, a failure to report 100 junk or salvage automobiles could result in a civil fine of up to $100,000,” said the NMVTIS website.

How well does your insurance software help you stay NVMTIS compliant?

Knowing about NMVTIS requirements is only half the battle. If your policy admin system is not designed to automate the monthly reporting burden that goes with them, you will have to handle it manually, raising your overhead and weighing down your operational efficiency. There’s a better way. Chances are your current insurance software is not even capturing the information required to automate the reporting requirement.

Silvervine Software acts as your partner to help ensure that your business is completing *all* of the mandatory reporting, and takes great pride in educating our clients about these requirements. Request an insurance software demo to learn more.