Syndicated television news magazine “Inside Edition” reported Monday that State Farm is buying wrecks, fixing them and putting them back on the road with clean rather than salvage titles. According to a news release about the program, “more than a million wrecks are fixed up and put back on the road, but buyers of these vehicles don’t know their lives could be in danger each time they get behind the wheel – and experts say insurance companies could be part of the problem.”
Part of the program dealt with an investigation by the Indiana attorney general in the early 1990s that found that State Farm failed to give salvage titles to 830 wrecked cars as required by Indiana law. The company paid $4 million to a state-sponsored education fund that dealt with proper salvage title practice. State Farm claims that 99 percent of its total loss claims in the years in question were properly titled as salvage.
The company looked into the problem at the request of the attorney general’s office, and found a misunderstanding occurred with some of the salvage companies with which it contracted to handle wrecked vehicles. Some of the companies did not get the titles, due to miscommunication. State Farm reportedly tracked the vehicles back seven years and offered to repurchase them and pay for improvements made by the owners. If the owners did not want to sell, the company paid $2,500 in a lump sum.
“Inside Edition” also looked at vehicles auctioned with clean titles by insurance companies such as Liberty Mutual, Prudential and Allstate, according to the news release, and said that auction houses were pressured to manipulate damage estimates by insurance companies.
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