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Beware of Flood-Damaged Vehicles

Cox Automotive estimates the number of vehicles lost to Hurricane Florence-related flooding between 20,000 and 40,000. And, as typically occurs after a mass-flooding event, there are concerns about these vehicles being resold throughout the country – to unsuspecting buyers and to those who don’t understand the financial repercussions of purchasing a flood-damaged car.

The National Association of Insurance Commissioners (NAIC) offers a consumer alert with tips for identifying a previously flooded car, including:

  • Check the National Motor Vehicle Title Information System, a database of total loss and junk/salvage vehicles
  • Look for suspicious signs of a flooded vehicle (e.g. rust, corrosion, mildew smell)
  • Demand to see the title, as some car wholesalers will claim to have lost the title or will transfer it to avoid disclosing flood damage

Review the NAIC Consumer Alert

Insurance companies likely will not provide comprehensive and collision coverage on a flood-damaged car because its value and the extent of repairs are uncertain. In turn, without securing comprehensive and collision coverage, consumers likely cannot secure a car loan.

Pennsylvania Insurance Commissioner Jessica Altman in a recent press release on Florence-damaged cars added:

Even if the vehicle is new, if a claim is later filed, the insurance company will research the vehicle history and see the prior claim for flood damage. If the vehicle is deemed to be a total loss, the insurer will likely pay out significantly less than would be paid for a vehicle that did not have flood damage.

originally published by Insurance Agents & Brokers



Posted 10:46 AM

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