Beware Harvey Flood-Damaged Vehicles

Flooded cars near the Addicks Reservoir in Houston, TX. (David J. Phillip, File/Associated Press)

The National Insurance Crime Bureau (NICB) is warning the nation’s consumers that vehicles flooded by Hurricane Harvey may soon be appearing for sale around the nation.

After a disaster, NICB works with its member companies, law enforcement and auto auction companies to identify the vehicles that have had an insurance claim filed and to process them for sale. All of the cars, deemed to be a total loss, will be retitled with the Department of Motor Vehicles and the new title will indicate the fact that the vehicle has been flood damaged. Most of the vehicles are sold to parts’ companies who will dismantle them and re-sell usable parts that were not damaged by the flooding.

The Vehicle Identification Number (VIN) is also entered into the NICB’s VINCheck® and the National Motor Vehicle Title Information System (NMVTIS) database.

NICB’s VINCheck allows car buyers to see whether a vehicle has ever been declared as “salvage” or a total loss by an NICB member that participates in the program. Insurers representing about 88 percent of the personal auto insurance market provide their salvage data to the program. It also alerts users if a vehicle has been stolen and is still unrecovered. VINCheck is a free public service available at: www.nicb.org/vincheck.

Keeping damaged cars out of the hands of unsuspecting buyers is a major focus of the industry. Unfortunately, some of the flooded vehicles may be purchased at bargain prices, cleaned up, and then taken out of state where the VIN is switched and the car is retitled with no indication it has been damaged.

NICB warns that buyers be particularly careful in the coming weeks and months as thousands of Harvey-damaged vehicles may reappear for sale in their areas. Vehicles that were not insured may be cleaned up and put up for sale by the owner or an unscrupulous dealer with no disclosure of the flood damage.

Buyers should have a vehicle checked by a reputable mechanic or repair facility before handing over any cash.

Consumer Resources

Hurricane Harvey Victims: Avoid Post-Disaster Scams

The National Insurance Crime Bureau (NICB) is working with law enforcement agencies, the state departments of insurance and insurance companies to warn victims about post-disaster rebuilding scams.

After a disaster, contractors will often go door-to-door in neighborhoods that have sustained damage to offer clean up and/or construction and repair services. Most of these people are reputable, but many are not. The dishonest ones may execute schemes to defraud innocent victims. One common scheme is to pocket the payment and never show up for the job, or never complete a job that was started. Another scheme is to use inferior materials and perform shoddy work that is not up to code in order to pocket more profit. Continue reading

Fraud Files: Ellicott City Flooding

In this edition of Fraud Files we focus on the flood that devastated downtown Ellicott City, Maryland. The sudden rainfall and flooding killed two people and destroyed or damaged at least 25 buildings.  The 6 inches of rain between 7 p.m. and 9 p.m. was the equivalent of a month of normal rainfall.

Northwest Warns of Flooded Vehicle Scams

NICB Senior Special Agent Scott Wagner is interviewed by KING5 about flooded vehicles in the northwest region. The Washington Department of Licensing is warning consumers about a flood vehicles damaged in the Texas and South Carolina floods that could get be repaired and then sold across the state.

Hurricane Katrina 10 Years Later: Birth of VINCheck – Part 5

In today’s final installment, see how NICB’s “Katrina Flood Vehicle Database” grew from an internal inventory and claims processing tool into VINCheck—the nation’s first free vehicle history and consumer protection service based on insurance claims.

Ten years after Katrina, VINCheck remains the most visited page on the NICB.org website.

Hurricane Katrina 10 Years Later: Vehicle Identification – Part 3

Recognizing the unprecedented number of vehicles that were flooded or otherwise damaged from Katrina, NICB dispatched teams to the region and established the Gulf Coast Task Force (GCTF) which operated from two locations: Baton Rouge, La. and Mobile, Ala. Over the next several months, NICB personnel from all over the United States were rotated through the GCTF where they worked side-by-side with state and local law enforcement officers in identifying and cataloging the thousands of damaged vehicles that littered every part of New Orleans and Mobile—and most points in between—in Nature’s random display of destruction.

Today’s video covers the challenges and creativity applied to the tremendous task of identifying damaged vehicles.

NICB and Hurricane Katrina: A 10-Year Retrospective Part Two

CarpenterKatrinaQuoteEach day this week the National Insurance Crime Bureau (NICB) will release segments of a five-part documentary video that provides first-hand recollections of NICB employees and law enforcement personnel as they reflect on their roles in the aftermath of Hurricane Katrina.

Recognizing the unprecedented number of vehicles that were flooded or otherwise damaged from Katrina, NICB dispatched teams to the region and established the Gulf Coast Task Force (GCTF) which operated from two locations: Baton Rouge, La. and Mobile, Ala. Over the next several months, NICB personnel from all over the United States were rotated through the GCTF where they worked side-by-side with state and local law enforcement officers in identifying and cataloging the thousands of damaged vehicles that littered every part of New Orleans and Mobile—and most points in between—in Nature’s random display of destruction.

Today’s video segment illustrates how NICB’s established operations centers and got down to work.

Video release schedule:

Monday: Part 1: Multistate Devastation

Tuesday, Part 2: NICB’s Initial Response

Wednesday, Part 3: Vehicle Identification

Thursday, Part 4: Coast to Coast Impact

Friday, Part 5: Birth of VINCheck

Hurricane Katrina: A 10-Year Retrospective

Katrina10YearsBeginning today—and every day this week—the National Insurance Crime Bureau (NICB) will release segments of a five-part documentary video that provides first-hand recollections of NICB employees and law enforcement personnel as they reflect on their roles in the aftermath of Hurricane Katrina.

Video release schedule:

Monday, Part 1: Multistate Devastation

Tuesday, Part 2: NICB’s Initial Response

Wednesday, Part 3: Vehicle Identification

Thursday, Part 4: Coast to Coast Impact

Friday, Part 5: Birth of VINCheck

Widespread destruction, NICB responds

While Katrina impacted parts of Alabama, Florida and Mississippi, its most widespread destruction occurred in Louisiana in and around New Orleans. After making landfall on August 29, 2005, Katrina’s heavy rainfall and significant storm surge caused breaches in a number of the levees protecting New Orleans from Lake Pontchartrain. As a result of those levee failures, roughly 80 percent of New Orleans was underwater by August 31.

In terms of property damage, Hurricane Katrina was the most costly on record with insured losses estimated at over $41 billion*. Part of that figure came from insurance claims on more than 300,000 vehicles damaged or destroyed by Katrina—vehicles that presented an attractive opportunity for fraud.

KatrinaFloodedVehiclesRecognizing the unprecedented number of vehicles that were flooded or otherwise damaged from Katrina, NICB dispatched teams to the region and established the Gulf Coast Task Force (GCTF) which operated from two locations: Baton Rouge, La. and Mobile, Ala. Over the next several months, NICB personnel from all over the United States were rotated through the GCTF where they worked side-by-side with state and local law enforcement officers in identifying and cataloging the thousands of damaged vehicles that littered every part of New Orleans and Mobile—and most points in between—in Nature’s random display of destruction.

As the vehicle inventory process took shape, GCTF personnel had some time to pursue allegations of insurance fraud which NICB was receiving on its hotline almost from the moment Katrina made landfall. Even as search and recovery efforts were underway, some saw opportunity to exploit tragedy for personal and illicit gain. NICB investigated everything from bogus claims for flooded vehicles that were nowhere near the storm area to yachts being scuttled by their owners, but blamed on Katrina so they could collect an insurance payoff.

The birth of VINCheck

VINCheckTo prevent unsafe flood vehicles from entering the commerce stream disguised as legitimate used vehicles, NICB created the “Katrina Flood Vehicle Database.” This database was populated with the vehicle identification numbers (VINs) of every Katrina-damaged vehicle that was insured by one of NICB’s 1,100 member insurance companies. Although initially developed to more efficiently share data with law enforcement, state fraud bureaus, motor vehicle departments and insurance companies, NICB realized that allowing consumers to have free access to this data was the best way to help them protect themselves from making an expense—and potentially life-threatening—flood vehicle purchase.

Within two months of Katrina’s landfall, The Katrina Flood Vehicle Database was opened to the public. As this free consumer protection grew in popularity and usage, its name evolved into VINCheck. With the new name and with the cooperation of participating insurance companies, VINCheck not only identified flood vehicles, but any vehicle that had been declared a total loss, salvage, or was an unrecovered stolen vehicle.

Since its creation, VINCheck has been the most visited page on the NICB.org website. From January 1, 2009, through December 31, 2014, more than 5 million VINs have been searched through VINCheck. From those queries, 48,442 theft records and 507,110 salvage records were identified meaning that VINCheck may have saved thousands of innocent consumers from experiencing significant financial losses—or worse.

The hurricanes of 2005, of which Katrina was the Queen of Destruction, challenged all levels of government as well as state and local law enforcement, the insurance industry and disaster relief agencies. The lessons learned from Katrina helped government and non-government officials deal with another mega storm when 2012’s Sandy devastated the Eastern Seaboard and other inland areas.

While natural disasters are an unfortunate reality of life we can understand them. To some extent, we can prepare for them and mitigate their damage. But when ill-intentioned people use these events to commit fraud against a population already reeling from a disaster, they will eventually attract law enforcement’s attention with NICB agents at their side.

As we did after Hurricanes Katrina, Rita, Wilma, Ike, and Sandy, NICB’s nationwide distribution of investigative and analytical resources are poised to deter, detect and defeat acts insurance fraud that would cause further harm to the legitimate victims of catastrophes.

*The Insurance Fact Book, 2015, p. 148, Insurance Information Institute, New York.

NICB and Hurricane Katrina: 10 Years Later

Beginning next Monday—and every day that week—the National Insurance Crime Bureau (NICB) will release segments of a five-part documentary video that provides first-hand recollections of NICB employees and law enforcement personnel as they reflect on their roles in the aftermath of Hurricane Katrina.

Video release schedule:

Monday, Part 1: Multistate Devastation

Tuesday, Part 2: NICB’s Initial Response

Wednesday, Part 3: Vehicle Identification

Thursday, Part 4: Coast to Coast Impact

Friday, Part 5: Birth of VINCheck

Besides being located here the videos will also be available via our YouTube account or at our website at www.nicb.org.

Insurance Fraud Headlines for June 19, 2015

Here are the top insurance fraud stories for today:

* Authorities Arrest Doctor, 3 Others in Complex Insurance Fraud Scam (NewsChief)

* Twelve charged in Western District of Kentucky as part of largest national Medicare fraud take-down in history (WHAS-TV)

* Car Thieves Now Targeting Vehicles for Parts (Insurance Journal)

* Car Shopping? How to Identify Flood Damage Before Buying (NY Times)