After a major hurricane hits the country there are hundreds of
thousands of insurance claims filed for damaged vehicles. In cases like
Katrina or Sandy the number of totaled cars alone accounted for dozens
of thousands, with insurers paying out billions of dollars for
comprehensive and total loss policies. Those affected by the disaster
use the payout money to buy another car while the destroyed one gets
towed away by an insurer-contracted company, which specializes in car
salvage after hurricanes. And that's where the totaled car starts its
new life.
Most of the cars damaged by seawater or wind end up being broken down
to salvage parts or melted for rubber and metal. But there are a
considerable percentage of these cars that get out of the procedure
completely intact to be sold to out-of-state and foreign buyers without
ever being titled as damaged by flood. This scheme gets applied after
every major hurricane, exploiting the inconsistencies in state
regulations concerning totaled cars. And what's really troubling about
the whole practice is that such cars are unsafe to drive despite their
seemingly perfect appearance.
Because it enters all of its systems and damages various components
with salt seawater tends to damage any car badly. Moreover, during
hurricanes seawater gets mixed with sand, which is another highly
corrosive agent, and assuming that some cars may stay flooded for weeks
until the hurricane impact is eliminated, you can imagine how badly the
car may be damaged. Those dealing with flooded cars know that very well,
so they will never list them as totaled. Instead they will eliminate
any mention of flood damage, which can easily be done when the car is
taken to another state or overseas. And after some repair and
refurbishing the potential buyer will never suspect that he's paying for
a faulty and potentially hazardous vehicle.
When getting car insurance quotes
for it one would assume that the fact that the car was flooded would be
determined. And since insurers have a national database on all cars
they've dealt with this is partially correct. However, the entries to
this database can be sporadic and inconsistent, which lets too many
flooded cars stay unnoticed even by the same insurer, which ends up
dealing with a different car after its title has been modified by the
fraudulent sellers and intermediaries. In a market where a flooded car
of a recent production year can cost about $2000-$4000 and get sold for
$15,000 the staggering revenue pushes the dealers to become really
thorough when it comes to title editing. That's why there are thousands
of such cars being sold legitimately after every major hurricane and
very few buyers even suspect a fraud years after the purchase when the
car starts to break down without an apparent cause.
The best advice experts give with regard to flooded cars
is to be very cautious about the car's origin, especially when buying
directly from the owner, not through a dealership. If it's a used car
make sure to learn where it came from, especially if you're making the
purchase sometime after a hurricane. A make sure to get car insurance
quotes for this exact car - there's a chance that the national insurer
database will contain a totaled entry for this vehicle.
