Over 637,000 Vehicles Damaged in Hurricanes Harvey and Irma

Flooded vehicles have finally stopped arriving at the Royal Purple Raceway east of Houston. Some 23,000 now await processing and retitling to be auctioned off for parts or to be scrapped. That is just one of several insurance industry salvage locations where more than 422,000 insured vehicles damaged by Harvey have been taken for processing. According to the National Insurance Crime Bureau (NICB), these totals surpass the number of claims that resulted from Hurricane Katrina (approx. 300,000) and from Superstorm Sandy (250,500).

In addition, more than 215,000 claims have been filed following damage to vehicles from Hurricane Irma in Florida.

These insured vehicles will be processed and rebranded with a salvage title and sold at online auctions to dismantlers who will save usable parts or have the vehicle crushed and sold for scrap.

The VIN numbers are entered into the NICB’s VINCheck database, which is free to the public and will indicate the vehicle has been damaged and branded. They are also entered into the National Motor Vehicle Title Information System (NMVTIS).

Unfortunately, owners of even more vehicles no longer carry comprehensive coverage that covers flood damage and those vehicles are not part of the system. The owner should request a new branded title but that may not happen. In fact, many flooded vehicles that weren’t insured will be cleaned up and sold with no indication of any damage.

Some unscrupulous buyers will also buy a branded vehicles, clean it up, and take it to another state where they will obtain a “clean” title and sell it with no warning that it has been flooded.

Anyone looking to buy a vehicle in the weeks and months ahead should be on the lookout for hidden flood damage. Here are some tips.

  1. Check vehicle carpeting for water damage
  2. Check for rust on screws or other metallic items
  3. Inspect upholstery and seat belts for water stains
  4. Remove spare tire and inspect area for water damage
  5. Check the engine compartment for mud or indicators of submergence
  6. Check under the dashboard for mud or moisture
  7. Inspect headlights and taillights for signs of water
  8. Check the operation of electrical components
  9. Check for mold or a musty odor

A sea of flooded vehicles pack a raceway outside of Houston, Texas.

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

Texas Storms Leave Thousands of Vehicles Flooded

Houstoncars

Flood-damaged cars in Houston

DES PLAINES, Ill. – As Texas and parts of the South-Central U.S. recover from record-breaking rainfall and widespread flooding, the National Insurance Crime Bureau (NICB) stands ready to assist law enforcement agencies, insurance and car rental companies with identifying and cataloging water-damaged vehicles to keep them from being resold to unsuspecting consumers. Already, authorities estimate that thousands of vehicles may have been flooded. “Unfortunately, natural disasters bring out dishonest salvage dealers who don’t tell you that the vehicles they’re selling are heavily water-damaged,” said NICB President and CEO Joe Wehrle.

“Consumers need to know that these vehicles may appear advertised for sale without any indication that they were affected by the flooding. As always, buyers should be careful when considering a used vehicle purchase in the weeks and months following a disaster like this.”

NICB agents are already working with law enforcement and member companies to identify these damaged vehicles to help keep would-be buyers from becoming fraud victims.

A History of Helping When Disaster Strikes

In the aftermath of Hurricane Katrina 10 years ago this August, NICB agents worked side by side with law enforcement officials to inspect thousands of vehicles damaged by flood waters. As a result of that unprecedented effort, NICB established a first-of-its-kind consumer protection service known today as VINCheck. It 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 VINCheck. 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.

NICB encourages those entities required by law to report flood-damaged vehicles to the National Motor Vehicle Title Information System (NMVTIS) which currently includes information on 96 percent of all U.S. vehicles. Currently, 44 states report data to the system which contains approximately 20 million salvage or total loss records.

Potential for Fraud

In the weeks ahead, consumers should be on the lookout for other post-flood fraud schemes such as towing companies that try to pressure them into using their service and then charge exorbitant towing and storage fees. In addition, homeowners in disaster areas should be alert to the potential for fraud by unscrupulous contractors and home repair businesses. “Fraud is an unfortunate reality in post-disaster environments,” said Wehrle. “As the initial recovery in Texas gets underway, fraudsters are already scheming to converge on the affected areas in order to scam disaster victims out of their money while promising to do repairs. The last thing victims of disaster need is to be victimized again.”

Consumer Resources

* For a free brochure with tips to avoid post-disaster fraud, click here.

* For useful checklists, including how to spot flood and salvage vehicle scams and post-disaster contractor repair schemes, click here.

* For free consumer access to the vehicle salvage records of participating NICB member insurance companies who collectively provide 88 percent of the auto insurance in force today, access NICB’s VINCheck.

Insurance Fraud Headlines for May 15, 2015

Here are the top insurance fraud stories for today:

* Mount Carmel man charged with vehicle insurance fraud (Insurance News)

* Two ambulance firms to pay $600,000 in insurance fraud settlement (Connecticut Post)

*Fraud Fraud: What it’s costing you, how to protect yourself (WABC-TV)

* Thieves eyeing Houston-area truck drivers’ tailgates (KTRK-TV)

* How to buy insurance for a salvage title car (CarInsurance.com)