According to the National Insurance Crime Bureau (NICB), a flood vehicle is defined as "being completely or partially submerged in water to the extent that the engine or other mechanical component parts have been damaged." Once a vehicle is flooded, the owner’s insurance company typically settles a claim by buying the vehicle and selling it at auction. Fraud can occur when auto sellers purchase damaged vehicles at auction, mask the water damage and resell the vehicles.
What to do if your vehicle has suffered water damage
* Check your oil. A reading of an oil level that is too high may indicate water in the engine. Do not start or run your car, it could cause severe damage. Contact your insurance company immediately. Comprehensive coverage of a vehicle includes losses other than collision, such as flood, fire, theft, vandalism, falling objects and colliding with animals.
* If you have a car loan, notify your lender of the damage.
* Act quickly to determine the vehicle’s current NADA average prior to the flood damage. Owners will need to know this when dealing with an insurance provider, and perhaps, in dealing with any lender.
* Determine how high the flood water reached on your vehicle. If the water reached the midpoint of the tire, there may be severe damage to electrical systems generally located along the bottom of the floor. Some experts consider the vehicle a total loss if this area is flooded.
* Get a written estimate of the damage – this will prove useful in dealing with the insurance company and if the owner sells the vehicle later on.
* When using an adjuster, make sure he or she is licensed by the Department of Insurance. If using a public adjuster, ask about fees or other charges prior to signing an agreement. For additional information, contact the Kentucky Department of Insurance, 800-595-6053 or http://insurance.ky.gov/kentucky/
* If the owner is considering retaining and using the vehicle, have it thoroughly inspected for safety.
* When selling the vehicle, always disclose the past water and other damage. Failure to disclose that could subject the seller to legal liability. Purchasers of vehicles should be careful to fully inspect for signs of flood damage.
Kentucky requires titles to be branded as "water-damaged" or "salvaged;" however, an unscrupulous dealer may obtain fresh documentation that hides the vehicle’s history and damage. When searching for a used car, always fully inspect the vehicle and look for signs of flood damage.
Tell-tale signs of vehicle flood damage
* Look for watermarks along the body and seams and for traces of dried mud, particularly under the dash area.
* If carpeting has been replaced, be suspicious. Look for signs of improper fitting or color matches to help determine if the carpet has been replaced. Also, take note of discolorations in upholstery.
* Look at the engine and its electrical parts. Pull back rubber boots around electrical and mechanical parts.
* Inspect for grit in alternator crevices, behind wiring harnesses, and flaking metal along the undercarriage that should not occur with later model cars.
* Check switches, gauges and indicator lights for proper functioning.
* Check vent system and air/heat mechanism. Turn off and on several times. Notice any smell of mildew or other flood indicators. Look in vents for mud residue.
* Look in trunk and spare-tire well for mud residue as well as head lamps and other lights.
* Are screws rusted in the console, glove box or interior panels or other areas that normally would not be exposed?
* As with any used car purchase, do business with a reputable dealer and have the auto inspected by a reputable mechanic BEFORE you purchase.
