Car stolen & considered total loss but State Farm won’t pay out bc of car title
I’m hoping someone here has dealt with a similar situation because I’m completely stuck between my insurance company, the DMV, and two lenders.
Here’s the timeline:
-Car stolen: September 2, 2025
-Car deemed total loss: October 2025
-Have been paying $200/month car insurance + 7 visits to the DMV and countless calls with Statefarm
I originally financed my car through Honda Financial.
I later refinanced with Bank of America, and Honda was paid off.
Unfortunately, the title was never updated to reflect Bank of America as the lienholder before my car was stolen.
The car was reported stolen to the police, never recovered, and has now been declared a total loss by State Farm.
I have since paid off my Bank of America loan completely, so there is no outstanding loan anymore.
Honda has provided me with a lien release.
Here’s where I’m stuck:
The title I have is not “perfected.” It still reflects the incomplete transaction from when the refinance happened. State Farm says they cannot pay my total loss claim until they receive a perfected/clean title. They will not accept the lien release to move forward.
I went to the DC DMV, and they initially told me I needed to obtain a salvage title. However, to get a salvage title, they require the vehicle to be inspected which is impossible because the vehicle was stolen and has never been recovered. They can’t update the title either bc in the system it’s flagged as “stolen.”
So now I’m stuck in a loop:
State Farm won’t pay because the title isn’t clean.
DMV says they can’t do anything. They’ve actually reached out to the police department to remove the flag so they can update the title but that’s been 2 months ago and I haven’t heard anything back.
I can’t get an inspection because I don’t have the car.
The car can’t be recovered because it’s still stolen.
Has anyone in DC (or another state with a similar process) dealt with an unrecovered stolen vehicle where the title wasn’t perfected after a refinance?
Specifically:
How did you get the title corrected or perfected?
Was there a special DMV process for unrecovered stolen vehicles?
Did your insurance company eventually accept another form of documentation?
Ive spent sooo many hours at the DMV trying to figure this out. I appreciate any insight or suggestion.