A. If a vehicle that is subject to the issuance of a certificate of title or registration pursuant to this chapter becomes a salvage vehicle, stolen vehicle or nonrepairable vehicle and is acquired by an insurance company as a result of a total loss insurance settlement, the insurance company or its authorized agent shall submit an application, as determined by the insurance company or its authorized agent, to the department within thirty days after the certificate of title is properly assigned by the owner to the insurance company, with all liens released, on a form prescribed by the department for either a salvage certificate of title, stolen vehicle certificate of title or nonrepairable vehicle certificate of title. The selected certificate of title shall include all of the following:

1. 1. A properly endorsed certificate of title except that a notarized signature on the certificate of title or on any supporting documents required for the transfer is not required.
2. 2. A lien satisfaction, if applicable.
3. 3. The appropriate fees.

I. Except as provided in subsection L of this section, the department shall issue a certificate of title to a vehicle that has been issued a salvage certificate of title or stolen vehicle certificate of title as a result of a total loss settlement by reason of theft if the vehicle is recovered and was not wrecked or stripped of essential parts and the insurance company or its authorized agent submits an affidavit to the department in a form prescribed by the department stating either of the following:

1. 1. The vehicle is a recovered theft and both of the following:

   1. (a) The vehicle was not wrecked or stripped of essential parts.
   2. (b) To the insurance company's or its authorized agent's actual knowledge, no air bag or component part necessary to the proper function of the air bag system deployed in the vehicle or was removed from the vehicle.
2. 2. The vehicle is a recovered theft and, to the insurance company's or its authorized agent's actual knowledge, an air bag or an air bag module deployed in the vehicle or was removed from the vehicle. The insurance company or its authorized agent shall list the location in the vehicle of each deployment or removal of an air bag or an air bag module.

L. If the vehicle is a recovered theft and components of the vehicle's air bag system, other than the air bag or the air bag module described in subsection I, paragraph 2 of this section, or other parts of the vehicle were removed compromising the functional integrity of the air bag system or the structural integrity of the vehicle, the insurance company or its authorized agent shall submit an affidavit to the department in a form prescribed by the department stating that the vehicle is a recovered theft and that components of the vehicle's air bag system, other than the air bag or the air bag module described in subsection I, paragraph 2 of this section, or other parts of the vehicle were removed compromising the functional integrity of the air bag system or the structural integrity of the vehicle. The department shall not issue a certificate of title to the vehicle but may issue a restored salvage certificate of title pursuant to section 28-2095 if all of the following apply:

1. 1. The vehicle is repairable.
2. 2. The department successfully completes a level three inspection as prescribed in section 28-2011.
3. 3. The vehicle meets other requirements the director prescribes.

N. Subsection M of this section does not apply to either of the following:

1. 1. An insurance company or its authorized agent who issues an affidavit pursuant to subsection I of this section unless the insurance company or its authorized agent intentionally fails to disclose the deployment or removal of an air bag, an air bag module or components of the vehicle's air bag system that compromise the functional integrity of the air bag system.
2. 2. A person who owns a vehicle that is issued a certificate of title pursuant to subsection I of this section if the person repairs or replaces the air bag or air bag module in the vehicle.

R. If a component part of a vehicle on which the vehicle identification number is affixed is to be replaced and if the vehicle is being repaired by a person other than its owner, the person shall notify the owner in writing and in the manner prescribed by the department that the part has been replaced, and the owner shall comply with section 28-2165. This subsection does not apply if the department has not issued a salvage certificate of title or a nonrepairable certificate of title and if the vehicle manufacturer or the manufacturer's authorized agent meets all of the following conditions:

1. 1. The frame is the component part replaced.
2. 2. The frame replacement is performed by the vehicle manufacturer or the manufacturer's authorized agent.
3. 3. If the original frame contained a vehicle identification number or serial number, the original vehicle identification number or serial number, in a similar size and style, is restamped in the replacement frame by the manufacturer or the manufacturer's authorized agent.
4. 4. Any existing manufacturer warranties remaining on the vehicle are not voided.
5. 5. The manufacturer or the manufacturer's authorized agent obliterates all vehicle identification numbers or serial numbers contained on the original frame.

T. For the purposes of this section:

1. 1. "Essential parts" means integral and body parts, the removal, alteration or substitution of which will tend to conceal the identity or substantially alter the appearance of the vehicle.

2. 2. "Nonrepairable vehicle" means a vehicle of a type that is otherwise subject to the issuance of a certificate of title and registration pursuant to this chapter and that either:

   1. (a) Has no resale value except as a source of parts or scrap metal and the owner or insurer designates the vehicle solely as a source of parts or scrap metal.
   2. (b) Is a completely stripped vehicle that is recovered from theft and that is missing the engine or motor, the transmission, 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 that the owner designates has little or no resale value except its worth as a source of scrap metal or as a source of a vehicle identification number that could be used illegally.
   3. (c) Is a completely burned vehicle that has been burned to the extent that there are no usable or repairable body or interior components, tires and wheels, engine or motor or transmission and that the owner irreversibly designates as having little or no resale value except as a source of scrap metal or as a source of a vehicle identification number that could be used illegally.
3. 3. "Salvage vehicle" means a vehicle, other than a nonrepairable vehicle, of a type that is subject to the issuance of a certificate of title and registration pursuant to this chapter and that has been stolen, wrecked, destroyed, flood or water damaged or otherwise damaged to the extent that the owner, leasing company, financial institution or insurance company considers it uneconomical to repair the vehicle.
4. 4. "Stolen vehicle certificate of title" means a vehicle ownership document issued to the owner of a vehicle that has been stolen and not recovered.