Salvage title?

Tom Jones · Nov 8, 2015

If an aircraft is totaled by an insurance company, is there any requirement for any log entry or re-registration/bill of sale to the insurance company to indicate that?

A friend has an airplane (not a Cub) that was totaled by the insurance company after another airplane chewed up the tail. He is the third owner since it was sold as salvage, including the IA who bought it to rebuild. It was bought from the insurance company (per the previous owner who was paid for the claim) and rebuilt. The bill of sale was signed by the previous owner when he was paid off for the claim, and then held by the insurance company until the salvage was sold. It was then filled out to indicate it was a direct transfer from the previous owner, in effect hiding the fact the airplane had been totaled or ever owned by the insurance company. No log entries were made by the insurance company. The rebuilder did not disclose that the aircraft had been totaled and rebuilt.

Never mind the ethics, is it legal for the insurance company to do this?

Tom

stewartb · Nov 8, 2015

A seller is supposed to notify the FAA that a plane is sold to protect him from the buyer's potential failure to register, right?

Legal? No idea, but I've bought a plane without re-registering and handed the old docs forward when I sold it with no record of my interim ownership. I think you're confusing "totaled" with the FAA's classification of "destroyed".

aktango58 · Nov 8, 2015

Registration must be current to fly. For it to sit, no.

Airworthiness is good for life, as long as it is maintained, or repaired, to airworthy standards.

Repairs to a plane, especially control surfaces (or replacement), are required to be entered into the airframe logbooks.

Does there need to be a statement that the plane was totaled? I don't think so.

Does there need to be a portion of the logs that describes work performed on the aircraft after the damage to return it back to airworthy condition: you betca!

When buying aircraft, one of the reasons to look at log books is to determine how much damage has been done in the past, and it is often hidden with little notes: propellor IRAN (Inspected, repaired as necessary); Engine changes or internal inspections not at TBO; wing tip replacements; wing repairs or replacements; single landing gear replacements...

Then when you check out the plane, look for paint color changes, (sometimes subtle), or differences in skins- one very smooth strait skin with surrounding not so much.

In your question, I am assuming that there is a sign off where the tail sections were repaired/replaced? If so, that gives you the clue that it has had some sort of damage, and prior to purchase I would be measuring for square, level and really looking at the work that was done. Then I would fly the plane to see if it flew strait, or you had to hold rudder hard over in cruise, or lots of aileron for S&L.

Some planes come out of that type of rebuild better than new... others will fly sideways. Hence the reason many of us pay for a Pre-purchase

mvivion · Nov 8, 2015

Tom Jones said:
Never mind the ethics, is it legal for the insurance company to do this?

Tom

A title is just that: A document which attests to the ownership of the airplane. If it's wrecked, it's still an airplane. Aircraft logbooks, on the other hand, should reflect repairs completed on the airplane.

MTV

Southern Aero · Nov 8, 2015

Tom Jones said:
If an aircraft is totaled by an insurance company, is there any requirement for any log entry or re-registration/bill of sale to the insurance company to indicate that?

A friend has an airplane (not a Cub) that was totaled by the insurance company after another airplane chewed up the tail. He is the third owner since it was sold as salvage, including the IA who bought it to rebuild. It was bought from the insurance company (per the previous owner who was paid for the claim) and rebuilt. The bill of sale was signed by the previous owner when he was paid off for the claim, and then held by the insurance company until the salvage was sold. It was then filled out to indicate it was a direct transfer from the previous owner, in effect hiding the fact the airplane had been totaled or ever owned by the insurance company. No log entries were made by the insurance company. The rebuilder did not disclose that the aircraft had been totaled and rebuilt.

Never mind the ethics, is it legal for the insurance company to do this?

Tom

Tom

I have ran into this a lot over the years......... The insurance company acts as a "broker" and does not have to be in the ownership paper trail. You are usually given a bill of sale from previous owner, not insurance company. It can also be a third party on behave of the insurance company. The term "totaled" mostly has to do with insured value. I bought a Katrina damaged (totaled) Decathlon and flew it home on a ferry permit. ......... did take a little work to straighten out some stuff but not bad. The insurance company stamped the log book with a statement something like "This aircraft was paid out as a total loss due to insured value". Its one of the best purchases we ever made. I recently bought one that had extensive damage to left side and no log book entry was made by the insurance company. As a rebuilder you do not care about the entry from an insurance company as you MUST document the repairs like any other. I have another Piper that the insured tried to keep the Airworthyness from the insurance company but they wont pay off without all pertinent paperwork. He deregistered it (commonly done) and sent in registration as "destroyed" to FAA. When time came to register it I did have to sign an affidavit that it was not destroyed and why. ..... but that was painless. . took an extra 6 weeks and I put another number on it. As long as you have all paperwork and bill of sale(s), you're golden. If you get a project without logs, it just usually has less value as times might not be able to be verified. If you don't get the data plate or Airworthyness, its another story. ....... you pretty much have just a bunch of parts/cores. An airworthyness can be replaced easily if you have the old one, not so easy if its lost. Data plate must come from manufacturer.

Totaled airplanes can be "totaled" because repair costs exceed 60 - 70% of planes repaired value or airplane was over insured as was the Decathlon I bought...... The insured was more than happy to get 55K for the damaged airplane that might have sold for 40 - 45K before the damage. That airplane should have been repaired but owner fought with AIG to total it. Being under insured is what will get them totaled the fastest.

I don't believe there was any "hiding" going on if bought like you describe. The insurance company was just the broker in the sale.

behindpropellers · Nov 8, 2015

Tom Jones said:
If an aircraft is totaled by an insurance company, is there any requirement for any log entry or re-registration/bill of sale to the insurance company to indicate that?

A friend has an airplane (not a Cub) that was totaled by the insurance company after another airplane chewed up the tail. He is the third owner since it was sold as salvage, including the IA who bought it to rebuild. It was bought from the insurance company (per the previous owner who was paid for the claim) and rebuilt. The bill of sale was signed by the previous owner when he was paid off for the claim, and then held by the insurance company until the salvage was sold. It was then filled out to indicate it was a direct transfer from the previous owner, in effect hiding the fact the airplane had been totaled or ever owned by the insurance company. No log entries were made by the insurance company. The rebuilder did not disclose that the aircraft had been totaled and rebuilt.

Never mind the ethics, is it legal for the insurance company to do this?

Tom

Tom,

The better way to look at this is "written off", not "totaled". I believe there is an option on the registration to classify the plane as "destroyed". Not sure if you can re-register it after that has been declared.

Tim

Southern Aero · Nov 8, 2015

behindpropellers said:
Tom,

The better way to look at this is "written off", not "totaled". I believe there is an option on the registration to classify the plane as "destroyed". Not sure if you can re-register it after that has been declared.

Tim

Yes you can after it is declared "destroyed". If the airworthyness is sent in with it or surrendered separately ........ then it is not possible, its either parts or man cave art. There is paperwork from the FAA (affidavit) don't remember if it has a document number or not......... wasn't real formal looking. Probly not done that often but is quite doable........... I just recently did it. I bid salvage routinely and always make sure proper documentation is with it before I pay for it. ..... but I have never had a problem with the insurance companies but have had problems with previous owners. :lol:

N86250 · Nov 8, 2015

I saw a Cessna get deregistered 2 years after it was wrecked. Owner A wrecked it and was paid off by his insurance company. Insurance sold it to a salvage yard. Salvage yard sold it to Owner B who spent another year and a half repairing it, got it ready to fly, and dropped dead. Owner B was too cheap to spend the money to register the airplane and pay the sales tax or personal property tax before it was flying so he never got around to the paperwork. Owner A saw it in the FAA database two years later still registered in his name and could see himself getting sucked into a lawsuit if the airplane was fixed and flying again while still registered to him, so he deregistered it as destroyed. As far as the FAA knew it was still his. Owner B's widow finally sold it and it took a while to straighten out the paperwork, but it's OK now. Moral is, don't wait for years before you take care of the paperwork on a project. Do it immediately and save the hassle even if it costs a few bucks. jrh
p.s. The FAA even accepted and filed a 337 for that airplane dated three weeks after it was reported destroyed. It's on the CD.

S2D · Nov 8, 2015

behindpropellers said:
. Not sure if you can re-register it after that has been declared.

Tim

I bought an airplane from an insurance company that had very little damage other than a frozen blower on the 1340. Went to reregister it and the FAA wanted pictures of the airplane and data plate since the previous owner sent in his registration with the destroyed line checked and signed. Thought about going after the A.H. for Fraud as it was not destroyed. But I cant register it until it is completely assembled again. As it was disassembled to transport.

robertc · Nov 9, 2015

S2D said:
I bought an airplane from an insurance company that had very little damage other than a frozen blower on the 1340. Went to reregister it and the FAA wanted pictures of the airplane and data plate since the previous owner sent in his registration with the destroyed line checked and signed. Thought about going after the A.H. for Fraud as it was not destroyed. But I cant register it until it is completely assembled again. As it was disassembled to transport.

I purchased my PA11 project that was reported as destroyed, and was deregistered for 15 years. I had a good paper trail for all sales. The FAA required a statement from my IA and my self that it was repairable and repaired, pictures of the complete aircraft, picture of the data plate, copies of 337's for repairs. I provided this after the restoration was complete. Providing the documentation was a minor issue. The best thing I did for the process was to work with Federal Aviation Title Company in Oklahoma City. For $50 they made sure the documentation was in order and then they walk it to the FAA office. I had the new registration in hand in less than two weeks after I dropped it in the mail to them. Best $50 I have spent. They will also get you going again quickly if you let your registration lapse. I would use them for any registration issue, they will save weeks of waiting.

aktango58 · Nov 9, 2015

S2D said:
I cant register it until it is completely assembled again. As it was disassembled to transport.

Not sure about you Montana boys, but up here we have an awful time flying planes that are disassembled, so until we get them back together the issue of registration is moot.:lol:

But I imagine if she gets together a week before you need her to work, it would become an issue. For that, get Eaton up to help you get it ready.

Steve Pierce · Nov 9, 2015

I bought a Tri-Pacer that had a hanger fall on it during a tornado. The owner sent in the Airworthiness Certificate and marked it destroyed. I called the folks in OK City and they fixed it for me.

Tom Jones · Nov 9, 2015

The biggest problem here is that since no one realized how much damage it had suffered, as it wasn't known to be salvaged, no one asked enough questions or looked hard enough. The replacement tail components had been damaged and rebuilt prior to their installation, but there was no documentation to that effect so they are not legally airworthy. And since it was several years, and one owner ago, the legal folks say it's almost impossible to get anything done about it.

The moral of the story is to do your homework. Carefully. Every time.

Tom

aktango58 · Nov 9, 2015

Tom Jones said:
The biggest problem here is that since no one realized how much damage it had suffered, as it wasn't known to be salvaged, no one asked enough questions or looked hard enough. The replacement tail components had been damaged and rebuilt prior to their installation, but there was no documentation to that effect so they are not legally airworthy. And since it was several years, and one owner ago, the legal folks say it's almost impossible to get anything done about it.

The moral of the story is to do your homework. Carefully. Every time.

Tom

There comes a time when one does have to have the FAA get involved. There are shady IAs out there that need their ticket pulled. There are folks that say they are doing an annual, that never look at the plane... one reason why researching who is doing the work is important.

Southern Aero · Nov 9, 2015

aktango58 said:
Not sure about you Montana boys, but up here we have an awful time flying planes that are disassembled, so until we get them back together the issue of registration is moot.:lol:
/QUOTE]

But the other side of that coin is I wouldn't want to put all the time and money in a restoration only to find out it could not be registered........ exception maybe being experimental exhibition that I really wouldn't want. I'd rather get the registration/documentation issue out of the way beforehand.:lol:

S2D · Nov 9, 2015

There is a bad precedence sweeping this country that says every major repair you find on an aircraft has to be documented and in the records. That only applies to major alterations. A repair station could repair the part and after a while the yellow tag or what ever is lost. this does not make the airplane unairworthy. I can repair and wing and submit a 337 for aircraft A and a couple years later aircraft A is wrecked but the repaired wing is undamaged. this wing is then put on aircraft b because of damage to its wing. After a year there is not legal requirement to keep the documents that the wing was replaced. An IA s job is to ascertain the aircraft is in airworthy condition. not find every record that could have gone with the plane.

Fat Kid · Nov 9, 2015

So what your friend needs to do at this point is have the previous repairs and the tail section of the aircraft inspected by a IA or certified Repair Station and to have that entity document on a 337 that they inspected previous repairs made by persons unknown and the repairs were done in accordance with 43.13 or the aircraft's structural repair manual.

This is of course assuming the repairs made to the tail are airworthy repairs. If the IA or repair station find an unairworthy repair then it will need to be repaired properly and then documented on a 337 or 8130.

Also be careful using the word rebuilt when referring to repairs made to aircraft. Only the factory can rebuild an aircraft or component. Not trying to be the a semantics Nazi but people have been busted for making log book entry's stating they rebuilt some component or aircraft. Just FYI.

I hate it when i find undocumented repairs on aircraft while doing an inspection. In most case's I don't think it is because some one was trying to be shady or corrupt. I think people get lazy when it comes to paper work and some times the paper work takes longer then the actual repair. That's certainly no excuse for not doing proper documentation of a repair or overhaul but i believe that happens in more case's then some one trying to get away with something underhanded.

mvivion · Nov 9, 2015

I'm with Brian. Even if you had to get a DAR to issue a new airworthiness certificate, an airplane, even with NO logbooks can still be airworthy and registered. I'd do some more looking into that with the FAA and/or a DAR.

MTV

Tom Jones · Nov 9, 2015

The airplane is an Extra 300, and the parts in question are composite. That makes the inspections much more difficult, particularly when the specific damage is unknown, and gives lots of IA's the heebie-jeebies. In this case they will be going to an experienced composite shop (with a DER available) for inspection and repair. The rudder is way out of spec in both weight and mass balance (too far aft) and clearly not airworthy, even though it's flown over 100 rather gentle hours prior to the discovery of the problem. Everyone thinks it's too much of a flutter risk as is. Snap rolls, tumbling end-over-end or going backward isn't a great thing to do with dicey tail surfaces!

Hopefully it's repairable. New parts are $$$$$$$. I suppose it could ultimately be moved into Experimental-Exhibition to solve part of the problem, but that carries some PITA rules (much worse than regular homebuilt experimental) to go with the good parts, too.

Tom

Salvage title?

Tom Jones

stewartb

aktango58

mvivion

Southern Aero

behindpropellers

Registered User

Southern Aero

N86250

Registered User

S2D

robertc

aktango58

Steve Pierce

Tom Jones

aktango58

Southern Aero

S2D

Fat Kid

mvivion

Tom Jones

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