July 2, 2013 by Canadian Underwriter
Consumers looking to buy a used automobile are advised to be aware that vehicles deemed a total loss from the flooding in Alberta will find their way to market for unsuspecting buyers elsewhere, Economical Insurance reports.
“History has shown that unscrupulous people buy flood-damaged cars, clean them up and sell them at attractive, below-market prices,” notes a statement from the property and casualty insurer. Although not against the law, it is illegal to hide the truth of a vehicle’s history, Economic Insurance adds.
A buyer of a flood-damaged vehicle will find that it will likely require significant and expensive electrical and mechanical repairs, which may only become apparent six to 12 months after purchase, the statement advises.
Buyers are cautioned to be on the lookout for conditions that should put a stop to purchasing these vehicles. Consider, for example, if the prospective buyer notices the vehicle was only recently registered in the province, Rocco Neglia, Economical’s vice president of claims, notes in the statement. “You need to ask yourself, ‘Where did this vehicle come from?’ and ‘What happened to the vehicle before it was registered in Ontario?’” Neglia says.
Below are a number of other tell-tale signs that should raise questions:
The safest way to avoid purchasing a flood-damaged vehicle is to only buy from reputable dealers, notes the statement from Economical Insurance. Before purchasing, have the vehicle inspected by a third-party garage and insist on being given a formal vehicle history report.
Similar cautions were issued following Superstorm Sandy. “Car buyers need to be vigilant. A flood damaged vehicle can be dangerous,” Terry O’Keefe, manager of communications for the Ontario Motor Vehicle Industry Council (OMVIC), noted in a statement last November. Water from a storm and flooding can enter electronic components of vehicles, causing corrosion and malfunctioning of important safety features, OMVIC reported at the time.
A preliminary estimate released in February by the National Insurance Crime Bureau (NICB) in the United States pegged the number of vehicles damaged from Sandy at approximately 250,500. The figures reflected insured losses based on the NICB’s claims data and included claims with varying degrees of damage.
Image: Blairemore, Alta. on June 21, 2013. (Source: Government of Alberta)
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