Beware of Flood Damage to Used Cars

If you’re in the market for a pre-owned vehicle, you’ll want to use extra caution making your purchase following devastating flooding due to recent hurricanes. There have been reports of flood damaged vehicles being re-sold to unsuspecting buyers throughout the country.

Identifying a Flood Damaged Vehicle

The National Association of Insurance Commissioners (NAIC) provides tips for identifying a previously flooded car, including:

• Check the National Motor Vehicle Title Information System – The National Motor Vehicle Title Information System (NMVTIS) is designed to prevent the concealment of flood damage and other vehicle histories. NMVTIS is overseen by the U.S. Department of Justice (DOJ) and offers information to help protect you from title fraud and unsafe vehicles.
• Look for suspicious signs of a flooded vehicle (e.g. rust, corrosion, mildew smell) and check the engine for a high water mark on the block or radiator, indicating the car has been flooded
• 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
• Check comprehensive vehicle history reports which are produced with the vehicle identification number (VIN) through resources like Carfax

What to Expect from Your Insurance Company

Insurance companies most likely will not provide comprehensive and collision coverage on a flood-damaged car because its value and the extent of repairs are uncertain. Without insurance, securing an auto loan is impossible. In the state of Pennsylvania, minimum liability auto coverage is required by law.

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.