Flooded and wrecked vehicle disclosure
sought
The National Automobile Dealers Association (NADA)
wants to make America’s roadways safer by protecting consumers
from purchasing flood and salvage vehicles. Their efforts took a
big step forward when Senator Trent Lott (Republican, Missouri)
introduced legislation (S. 3707) that would require insurance companies
to make total-loss information commercially available to the public.
Approximately five million vehicles were “totaled”
by insurance companies last year due to extensive damage, flooding
or theft. But thousands of these “totaled” vehicles
are rebuilt and then sold, with clear titles, to unsuspecting customers.
This problem grew dramatically worse with the estimated 500,000
vehicles damaged by Hurricane Katrina. There is evidence that many
of these flood-damaged vehicles are now returning to the marketplace.
The NADA-supported approach focuses on the Vehicle
Identification Numbers of totaled vehicles. The NADA approach would
require auto insurance companies to make commercially available
the date of the total loss; the primary reason for total loss (i.e.
damaged, flooded, stolen); and the odometer reading on the date
of total loss.
Despite repeated attempts to curb salvage title
fraud, this problem persists because state motor vehicle titling
laws are confusing and incomplete. No public database exists to
“red flag” all of the problem vehicles. In 2005, State
Farm admitted to having resold 30,000 totaled vehicles over several
years without salvage titles. In a 2001 Iowa case, Progressive Insurance
acknowledged a similar practice on a much smaller scale.
For more information, visit NADA’s website
at www.nada.org. |
