(1) If the cost of repairs exceeds the replacement value of the vehicle, the theft-branded certificate of salvage shall serve as an ownership document. If the vehicle thereafter passes the reconstructed salvage vehicle inspection requirements under section 1165 (relating to reconstructed vehicles), it shall receive a certificate of title branded reconstructed and recovered-theft vehicle.

(2) If the cost of repairs is more than 50% of the replacement value of the vehicle and the owner elects to retain title to the vehicle, the owner shall apply for a certificate of title branded recovered-theft vehicle. A legible copy of the vehicle damage appraisal report completed by an insurer or licensed physical damage appraiser must accompany an application under this paragraph. The damage appraisal report shall include the replacement value of the vehicle.

(3) If an owner has received a certificate of salvage branded as a theft vehicle after a payment has been made and the stolen vehicle is located and thereafter passes an inspection by a licensed physical damage appraiser in which the damage does not rise to the level of paragraph (2), the owner may apply to the department for an unbranded title. A legible copy of the vehicle damage appraisal report completed by an insurer or licensed physical damage appraiser must accompany an application under this paragraph. The damage appraisal report shall include the replacement value of the vehicle.

(4) An individual who has not been paid the replacement value for the vehicle and has not received a certificate of salvage may use the existing certificate of title without applying for a new title.