When an insurance company has paid a claim for a vehicle and taken ownership from the insured, they have the option of processing the title as a certificate of destruction. In this case the vehicle is intended to be destroyed and never to be used on the road or registered. It is unlikely that a vehicle with a certificate of destruction can ever be issued a valid title for transfer.
A vehicle with a certificate of destruction can sometimes appear to be in acceptable condition. The insurance company decides to prevent the car from road use to limit their liability in the event that the car is driven and is involved in an accident at a later date. If it is proven that an injury in an accident is because the car had some existing defect, the injured person could claim that the insurance company should not have let the car go back on the road.
A vehicle in otherwise good condition can be issued a certificate of destruction if the insurance company thinks that the airbags could be damaged, the frame could be weakened, or simply does not want to spend the money to do a detailed inspection, and just wants to sell it cheap to a junkyard.
For more information on titles for these types of vehicles, visit JunkTitle.com
If you have a salvage title, certificate of destruction, or other branded title, be sure to follow all applicable Federal Laws on title branding.