Texas has the highest number of flood damaged vehicles in 2016 at 43,000. And Houston is the dubious winner of the city with the most flooded vehicles in the same year – 19,314. So, what happens to those damaged cars? Surprisingly, according to recent research by Carfax, more than 250,000 flood damaged cars are resold.
By definition, a flood vehicle has been completely or partially submerged in water to the extent that its body, engine, transmission or other mechanical component parts have been damaged. If the vehicle is so damaged that it is no longer operable, the driver's insurance company settles the claim by buying the vehicle and selling it as a “salvage” at an auto auction, according to the National Insurance Crime Bureau.
Flood-damaged vehicles offer a tempting opportunity for unscrupulous dealers to defraud consumers. Some states require that the words “salvage only” appear on vehicles with damage over 75% of its value. The loophole is if the owner doesn’t have comprehensive insurance coverage, the vehicle may not get a “salvage” or branded title at all. Or the dealer could switch or clone manufacturer’s serial number plates to conceal the damage. And, of course, there’s an option to resell damaged cars in a state that has less strict title standards.
In recent years, some states in the hurricane-prone parts of the United States have adopted rules that require that the words “flood vehicle” be included on the titles of vehicles that have been water damaged and rebuilt. Before such a vehicle can be sold, the buyer must be notified in writing of the vehicle’s past flood damage. However, if another state doesn't have such strict laws, it can become a dumping ground for undeclared flooded vehicles.
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