April 2010 Archives

In the recent "200 year event" flooding in Rhode Island, hundreds if not thousands of cars were submerged in flood waters. Can those cars be salvaged? Probably not, according to experts. The National Insurance Crime Bureau (NICB) defines a flooded vehicle as one that has been completely or partially submerged in water to the extent that its body, engine, transmission or other mechanical component parts have been damaged.

According to Ronny Pucino, a body shop owner in Rhode Island, there are three main elements in a car that are affected by flooding: the upholstery, the engine and the electronics. The extent of any damage depends largely on the level of water that the car experienced. Cars that have had wheel-top level damage may be able to be salvaged if the owner acted quickly to address the damage. But when water reaches as high as the dashboard, it is more likely that the engine and the electronics have been compromised and the car will be unsalvageable.

Being alert for flood-damaged cars should be of concern to all used car buyers, regardless of geography. Often, damaged cars are professionally refurbished and shipped to other parts of the country to be sold. Experts say that flood-damaged cars end up going to places where consumers won't be likely to be on alert. Even when cars "clean up nice," they may well have electrical or engine damage.

Edmunds.com offers some good tips on how to avoid buying a flood damaged car. They present 6 tell-tale tips, which we've summarized, but click on the article for more detail.

1. Get a vehicle history report.
2. Be alert to unusual odors.
3. Look for discolored carpeting.
4. Examine the exterior for water buildup.
5. Inspect the undercarriage.
6. Be suspicious of dirt buildup in unusual areas.

CARFAX offers more excellent tips for detecting and avoiding flood-damaged cars. They also offer vehicle history reports for a fee, which could be a worthwhile investment if you find a car you're thinking of purchasing.

One other consumer service is the NICB's VINcheck, a free service provided to the public to assist in determining if a vehicle has been reported as stolen, but not recovered, or has been reported as a salvage vehicle by cooperating NICB members. You must have the Vehicle Identification Number (VIN) to perform a search, and a maximum of five VINCheck searches can be conducted within a 24 hour period.

If you bought trip insurance before the recent volcanic eruptions, your travel may be covered by the policy, depending on exclusions. But if you are hoping to get travel insurance to protect you from any volcano-related disruptions in the future, you are probably out of luck - Scott McCartney of the Wall Street Journal reports that as of April 13, there is no ash coverage anymore. It's similar in principle as to why you can't call your agent to buy a flood insurance policy in the middle of a hurricane. Insurance covers unexpected events, not events that are in progress.

Now if you already had trip insurance, are you covered? That's a complicated issue because there are no standard travel insurance policies - they vary widely. Whether or not you are covered will depend on the type of coverage you bought, how much coverage you bought, what the exclusions are, and the specific practices of the company you bought it from. McCartney says:

Even if purchased before April 13, travel insurance can be of limited utility to travelers. If airlines refund tickets for canceled trips, for example, there's no claim with insurers. If you haven't left home, you won't get money for hotels and accommodations under most policies. And many policies have limits on daily expenses if you are stranded away from home.

It's too soon to get an estimate of how many travelers have been displaced, but the final tally will no doubt be enormous. Insurance companies report that they are being deluged with queries and calls for help. An article in the New York Times tells us that trip insurers are looking at an event that will cost millions.

"While there can be some exclusions, companies have typically covered nonrefundable prepaid travel that can pay stranded passengers $150 to $250 a day for a maximum of $1,500."

More resources
The Insurance Information Institute offers an overview of the various types of trip insurance. A prior blog post featured a Travel Insurance Quiz. Also see CNN's article:6 Tips to avoid travel insurance fraud

Shopping for health insurance coverage now that health reform has passed? Buyer beware of health insurance scams. That's the message from the National Association of Insurance Commissioners (NAIC), which is alerting consumers that scammers and shady operators have been surfacing since the passage of the Patient Protection and Affordable Care Act of 2009 (PPACA). Some insurance regulators on the state level are reporting that they are receiving complaints about scam artists going door-to-door or setting up toll-free phone lines to sell bogus “ObamaCare” insurance policies.

Here are some NAIC red flags to alert you to potential fraud:

• Time-limited offers or policies with limited enrollment periods. Reputable health insurance concerns will not ask you to make a quick decision!
• A claim that the coverage is required by law. There are no coverage requirements until 2014.
• The salesperson doesn’t explain the coverages included in the policy or does not provide a full list of the coverages.
• The salesperson claims the coverage will be "grandfathered" or exempted from changes required by the health care reform law. The only policies that would be "grandfathered" are those which were in already in force before the law was signed.

Your state insurance authority is your most important resource to check insurance company and insurance agency licensing information. If you have any suspicious sales calls - either by phone or in person - trust your instincts and take the time to check things out.

If you suspect fraud or have a complaint, NAIC offers a resource to file a report.

New England is still recovering from the record Northeast flooding. If you missed it, you can view the scope of the damage in this gallery of dramatic Northeast flood photos. Now, it's time to move forward. We've gathered various recovery resources for those who suffered damage in these floods.

Are you eligible for disaster assistance? At DisasterAssistance.gov you can apply for assistance online, or take an anonymous pre-screening questionnaire to see if you are eligible for assistance. Various other resources are available. including advance preparation for emergencies, and resources for disaster recovery.

Rhode Island
Rhode Island Severe Storms and Flooding - This page provides updated information and resources for Rhode Island residents and businesses in all 5 counties who were affected by the recent flooding. The first step in recovery entails filing for disaster recovery assistance with FEMA. As of this writing, FEMA has opened Disaster Recovery Centers in Cranston and Warwick. The site offers information from FEMA on where and how to apply for assistance, as well as links to other recovery resources. Check back for updated information.

Massachusetts
Massachusetts Severe Storms and Flooding - This page provides updated information and resources for Massachusetts residents and businesses that were declared as major disaster areas March 29: Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk and Worcester counties. The first step in recovery entails filing for disaster recovery assistance with FEMA. As of this writing, FEMA has opened 5 Disaster Recovery Centers and has FEMA inspectors assessing storm damage in seven Massachusetts counties. The site offers information from FEMA on where and how to apply for assistance, as well as links to other recovery resources. Check back for updated information.

Insurance
Standard homeowners insurance does not cover flood damage, so unless you have a specific flood policy, you may be out of luck. Check to see if you have a sump pump failure rider to supplement your homeowners, which may offer some relief.

Even if your homeowners policy doesn't cover flooding, if you have experienced anything more than minor damage, you may want to file a claim:

• When your insurer investigates the actual cause of the loss, you may have some coverage.
• If you are eligible for FEMA (Federal Emergency Management Agency) assistance, you will likely need a letter of denial from your insurer. By law, FEMA cannot duplicate any assistance that insurance already covers.
• Your insurer and agent may be able to suggest resources and service firms for emergency restoration professionals in your area. They may have other resources and advice available to help you mitigate and recover from your loss.
• If you have comprehensive insurance as part of your standard auto insurance policy, you may be covered for water or flood damage to your car. You would need to contact your agent to check the specific coverage provisions in your policy.

• Flood recovery - from Floodsmart.org
• Recovering From and Coping With Flood Damaged Property - from FEMA
• FEMA: Mold can be a danger when evacuees return home - this release includes some recommended steps for dealing with mold
• Mold cleanup, removal, and remediation - information from the Centers for Disease Control
• Flood Cleanup: Indoor Air Quality - from the Environmental Protection Agency
• How to clean up after a flood (PDF) - from the Colorado Extension Service
• Flood damage cleaning fact sheet (PDF) - good information on what can and can't be salvaged in terms of fabrics and garments from the Drycleaning & Laundry Institute
• What to do with a flooded car: It depends on the water's depth