I'm with you at least part way.
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Originally Posted by Padgett
[W]hen the cost to repair exceeds the value of the item and the insurance company "totals" (exceeds the total amount of the insurance) ... one of two things happen: either the insured accepts the maximum amount the insurance company offers and surrenders the title ...
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Why would I surrender the title? The insurance company has no ownership rights to the trailer. They simply agreed to pay up to a certain maximum amount in the event of damage, and when they pay that, they have met their obligation. The insurance company has no further responsibility or involvement.
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... or [the insured] agrees to accept a lesser amount and retains the item. Strictly speaking the second case is "agreed insured value" of the damage and your second case applies.
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Please clarify - agrees to accept a lesser amount
than what? If less than the amount of the damage, then I agree with you. The insurance company pays, I retain, end of story. (If you meant less than the policy coverage, then I don't agree, but I don't think you meant that.) Assuming I agree to accept a lesser amount than the amount of the damage, and I retain the item, then nothing should happen to the title. And that includes the insurance company calling DMV.
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The problem occurs when an insurance company obtains the physical title and immediately submits it to the DMV to transfer ownership to them.
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Why does the insurance company want (or have right to) ownership? I agree that this is where the problem occurs.
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The cheapest way to do this is to obtain a salvage title and once they do that you are done even though you never intended to transfer the property.
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Personally I always get a paper (not electronic) title, keep in a safety box, and never surrender or even produce the title unless it is my intent to surrender the item.
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But how does this help if DMV alters the official title of record? As soon as the new owner submits the paper title you gave him, DMV will spot the discrepancy, and the nastiness begins.
You are certainly correct in saying that things are different in different states. And I'm not even close to understanding all of it. But some of this seems like core issues, and I feel like there is something basic that I am not understanding.
Bill