Post-Sandy, Insurance Bureau Warns of Flooded Cars Being Resold

As crews begin cleanup efforts, adjusters begin damage estimates and victims piece their lives back together in the wake of Hurricane Sandy, the National Insurance Crime Bureau (NICB) is publicizing its free “consumer protection service” that identifies previously flooded and other types of damaged vehicles so that they can’t be “resold to unsuspecting customers in the future.”

The insurance bureau’s VINCheck system logs cars that have been “declared as salvage” by any of the insurance companies that are NICB members, according to a press release, which added that the bureau counts more than 1,100 property/casualty companies and self-insured entities among its members.

“Unscrupulous salvage operators and dealers often try to conceal from potential buyers the fact that vehicles have been damaged by a natural disaster,” NICB president and CEO Joe Wehrle said in a statement. “As soon as local law enforcement is able to begin the process, NICB will offer our assistance with identifying these damaged vehicles to reduce the potential for consumers being taken advantage of.”

The “unprecedented consumer protection service” was launched following Hurricane Katrina after NICB partnered with authorities in Louisiana and Mississippi to identify and “inspect hundreds of thousands of vehicles damaged by flood waters.”

The NICB will also log vehicle damage into the National Motor Vehicle Title Information System (NMVTIS), a database that includes 88 percent of the U.S. vehicle fleet and 20 million salvage or total loss records, according to the bureau.

The National Automobile Dealers Association (NADA) also warned consumers about “water-damaged vehicles [that] may return to the marketplace.”

“Nefarious individuals may buy these vehicles, thoroughly clean them and attempt to resell them,” NADA stated in a press release.

“Do not try to start a vehicle that has been severely damaged by water,” NADA chairman Bill Underriner warned in the release. “Starting a vehicle even in a damp condition could cause harm to the driver and the vehicle’s onboard computers and wiring. A short in the electrical system can cause a shock, or worse, a fire.”

In the release, the organization also offered 10 tips to detect a flood-damaged car, including using the car’s vehicle identification number (VIN) to reference vehicle history databases.

The VINCheck, NMVTIS, Auto Check and Carfax systems referenced in NADA’s tips log vehicle history reports that consumers can rely on when they purchase a new vehicle. Those reports contain information about a vehicle if it has been damaged by flood or salvaged due to damage, a useful tool for consumers who don’t want to be hoodwinked into buying a lemon that sustained flood damage.

Also, the NICB offers the linked pamphlet with advice on avoiding illegal activities following disasters.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

No comments yet.

Comment on this article