The National Insurance Crime Bureau is advising consumers to be alert for potentially dangerous flood vehicles appearing in the used-car market in wake of Hurricane Irene.
Flood-damaged cars can be an attractive purchase for savvy consumers, but it can also lead to costly repairs and, potentially, life-threatening injuries, the non-profit group cautioned.
It warns that most consumers don’t have the training or the experience to spot flood vehicles. And consumers’ judgment may be swayed by a price that is just too good to pass up.
The group analysed insurance claims processed by its member companies. It shows that during last August alone, 11,789 flood vehicle-related claims were processed. This compares with just 994 processed in August of last year. New Jersey generated the most claims (4,121), followed by New York (2,809) and North Carolina (2,585).
As long as a seller discloses that a vehicle is a flood vehicle, then there is no fraud. In fact, many people buy such cars knowing that they will need to rebuild or replace affected parts.
But the trouble comes when a seller hides the fact that a vehicle has been declared as such and that fact is hidden from prospective buyers.
NICB says people who fraudulently traffic in flood vehicles are good at cleaning them up and presenting them for sale as perfectly fine used cars. To entice buyers even more, they are priced well below retail.
The group offers a free consumer protection service called VINCheck. The service allows consumers to check a vehicle identification number against millions of claim records processed by NICB member insurance companies. Consumers are also encouraged to use additional sources of vehicle history information, including the National Motor Vehicle Title Information System.
NICB also offers following tips to consumers to avoid flood vehicle fraud:
• Select a reputable car dealer.
• Inspect the vehicle for water stains, mildew, sand or silt under the carpets, floor mats, headliner cloth and behind the dashboard.
• Check for recently shampooed carpet.
• Inspect the interior upholstery and door panels for fading.
• Check for rust on screws in the console or areas where water normally doesn’t reach.
• Check for mud or grit in the spare tire compartment, alternator crevices, behind wiring harnesses, around the small recesses of starter motors, power steering pumps and relays.
• Check inside the seatbelt retractors by pulling the seatbelt all the way out and inspect for moisture, mildew or grime.
• Check door speakers as they will often be damaged due to flooding.
• Have a certified mechanic inspect the vehicle prior to purchasing it.
• Ask about the vehicle’s history. Ask whether it was in any accidents or floods.
• Inspect the title and ownership papers for any potential salvage fraud.
• Conduct a title search of the vehicle.
• Look under the hood for signs of oxidation. Pull back rubber boots around electrical and mechanical connections and look for these indicators: ferrous materials will show signs of rust; copper will show a green patina; and aluminum and alloys will have a white powder and pitting.
• Also consumers should trust their instincts. If the deal sounds too good to be true, it probably is.
The National Insurance Crime Bureau is a not-for-profit organization dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through data analytics, investigations, training, legislative advocacy and public awareness. It is supported by more than 1,100 property/casualty insurers and self-insured organizations.
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