Used car buyers beware: Don’t get hosed by flood-damaged cars


flood damaged cars partially submerged on a street

Used car buyer beware! That shiny used car with low mileage might look like a good deal, but take care that you aren’t buying a flood damaged car. It’s estimated that some half million vehicles were flooded in Texas and Louisiana during Hurricane Harvey, and there are sure to be many more after Irma. Resellers can be pretty good at the cosmetics so you could be deceived – engine and electrical problems may not be readily apparent.

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. Flood-damaged vehicles often surface in auctions and “for sale by owner” scenarios.

Edmunds.com offers 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.

The NICB has released this list of Flood Vehicle Fraud Prevention Tips:

  • Select a reputable car dealer.
  • Inspect the vehicle for water stains, mildew, sand or silt under the carpets, floor mats, headliner cloth and behind the dashboard.
  • Check for recently shampooed carpet.
  • Inspect the interior upholstery and door panels for fading.
  • Check for rust on screws in the console or areas where water normally doesn’t reach.
  • Check for mud or grit in the spare tire compartment, alternator crevices, behind wiring harnesses, around the small recesses of starter motors, power steering pumps and relays.
  • Check inside the seatbelt retractors by pulling the seatbelt all the way out and inspect for moisture, mildew or grime.
  • Check door speakers as they will often be damaged due to flooding.
  • Have a certified mechanic inspect the vehicle prior to purchasing it.
  • Ask about the vehicle’s history. Ask whether it was in any accidents or floods.
  • Inspect the title and ownership papers for any potential or questionable salvage fraud.
  • Conduct a title search of the vehicle.
  • Look under the hood for signs of oxidation. Pull back rubber boots around electrical and mechanical connections for these indicators: Ferrous materials will show signs of rust, Copper will show a green patina.
  • Aluminum and alloys will have a white powder and pitting.
  • Trust your instincts: If you don’t like the answers or the deal sounds too good to be true, walk away!

CARFAX offers more 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.

DMV.org talks more about VIN checks, offering a diagram showing where you can typically find a car’s VIN. They note that although there are many free VIN services, if you want a detailed report, you may have to pay a fee. We think you should also invest the cost for having a mechanic check over a used car before you buy it. Both steps could be a worthwhile investment to save you from later headaches. A good VIN check can tell you these things about a vehicle:

  • Past ownership.
  • Any liens held on the vehicle.
  • Vehicle maintenance.
  • Title history blemishes.
  • Faulty odometer settings.
  • Flood damage.
  • Accident history.
  • Car title check.
  • Whether a vehicle was determined to be a lemon.
  • Airbag deployments.

Vehicle modifications and the “right fit” can help protect aging drivers


two women in car. An older woman driver with a younger woman.
According to the Insurance Information Institute, drivers age 65 and older accounted for 18% of all traffic fatalities, higher rates of fatal crashes, based on miles driven, than any other group except young drivers. According to the National Highway Traffic Safety Administration, there were 40.1 million licensed older drivers in 2015 — a 33% jump from 10 years earlier. To understand how remarkable that spike is, consider that the general population of drivers only increased by 8% in the same time.

Older drivers are often very safe drivers: more likely to wear seat belts, less likely to speed and less likely to drink and drive. But when involved in accidents, they are generally more fragile than younger drivers and more susceptible to serious injuries. The good news is that there are ways for cars to be adapted and to help older drivers reduce their risk of injury during a crash.

CarFit is a free educational program created by the American Society on Aging and developed in collaboration with AAA, AARP and the American Occupational Therapy Association. It offers older adults the opportunity to check how well their personal vehicles “fit” them, and it provides information and materials on community-specific resources to enhance their safety as drivers and increase their mobility in the community. CarFit offers local events, but if there are none scheduled near you, they also offer tools, videos, information and resources.

You can download a helpful Carfit brochure (PDF) with tips to find the right fit and ways that cars can be adapted. An article from AARP talks more about Carfit, offering an excellent video that shows the checklist used to help get the right fit for older drivers.

Other resources to help older drivers

The American Occupational Therapy Association has a variety of tools and resources related to driving and mobility for seniors. You can also search a database to locate a Driver Specialist for driver evaluations or Drive Safe and Adaptive Driving programs near you.

The Clearinghouse for Older Road User Safety or CHORUS – search for older driver resources by state.

State Drivers License Renewal Laws Including Requirements For Older Drivers – scroll to see a chart that summarizes laws related to age by state.

Caught on camera: Insurance fraud backfires on scammer


Insurance fraud is a multi-million dollar crime that costs all of us money. This video from the dash cam of a UK driver shows just how brazen insurance fraudsters can be – but fortunately, the woman had a record of the scam on her dashboard camera.

This type of scam is a global phenomenon – here’s a 2015 compilation of comically inept fraudsters caught on camera. They are comical because there is a record. Without the video, some could turn into costly claims.

These criminals are all pretty ridiculous, but don’t be fooled – there are many sophisticated fraud rings that conduct “swoop and squat” and other staged auto accidents. See our prior post Fraud Watch: Staged Auto Accidents for some video examples of four common types of staged accidents.

The Coalition Against Insurance Fraud offers more information on some common staged auto crash scams, along with tips for prevention and what to do if you are involved an accident that seems suspicious.

Dash cams haven’t really taken hold here in the U.S. but if you are interested, here’s an article from Digital Trends that talks about the pros and cons: Take a hint from the Russians: It’s time to protect yourself with a dash cam,

Check your tires: It’s National Tire Safety Week


This week is National Tire Safety Week — and before you embark on all those summer day trips and vacations, it’s the perfect time to check your tires to be sure they are roadworthy and will offer you the best driving security.

According to the U.S. Tire Manufacturers Association, tires are safer than ever due to new tire technologies. Government data shows that tire-related crashes decreased by more than 50 percent between 2007 and 2010. Better technologies have led to reduced rolling resistance and better stability and traction in wet road conditions. Plus, “run flat tires” can keep working for up to 50 miles after a puncture.

But to keep tires at peak performance, there are a few best practices, summarized in an excerpt from a tire fact sheet infographic provided by the U.S. Tire Manufacturers Association, which offers more information on tire safety.

For more on the care, maintenance and safety of your tires:

How old are your tires? – How to check the age

Tire rating lookup – good to check before you buy new tires.

Tirewise – everything you need to know about buying and maintaining tires.

The life of a tire – We posted this clip a few years back, but think it is well worth recycling – it’s only about 90 seconds, and gives a good overview of what you need to know.

How to test and maintain your tires – Although this prior post focused on prepping tires for winter, there’s a handy infographic that sums up the essentials of what you need to know about taking care of your tires.

Does your new car have a spare tire? Don’t count on it! – Did you know that more than a third of all new car models are being sold without a spare tire? You don’t want to be caught short on the highway. Buyer beware: If you are in the market for a new vehicle, check to see if a spare tire is included. If not, a tire may be available as a purchase option.

What’s “usage-based insurance” all about?



You may have heard the term “usage based insurance” or UBI and wondered if it’s right for you. Essentially, UBI is technology called telematics that monitors your actual driving behavior and experience. It may be a device installed on your car or on your phone. It can measure many variables, including what, when, where, and how you drive. The collected data is used by insurers to help determine the cost of your insurance.

Expect to hear more and more about UBI. Today, availability is limited to some insurers and some states and it is a choice you make as a consumer. Expect it to continue growing as a mechanism for pricing auto insurance. It’s estimated that by 2020, about 70% of all insurers will use telematics, according to the National Association of Insurance Commissioners (NAIC).

For a good overview, NAIC offers a one page explainer: Understanding Usage-Based Insurance. Or if you’d like a deeper dive on the topic, you can read their trend report on Usage-Base Insurance and Telematics.

NAIC describes how UBI insurance premiums are determined vs how traditional premiums are determined:

“There are several variations of UBI including pay-as-you-drive, pay-how-you-drive, pay-as-you-go and distance-based insurance. These options are different from how insurers charge for traditional auto insurance. Traditional auto insurance relies on actuarial analysis of data including driving record, credit-based insurance score, personal characteristics, vehicle type, garage location and more. A UBI program adds individual driving behaviors as an additional rating factor.

UBI may have a direct impact on your premium as UBI programs associate costs with individual and current driving behaviors instead of relying on statistics based on past trends and events.”

By tracking data, good or infrequent drivers will pay less and frequent or higher risk drivers will pay more. It’s expected that this could yield significant benefits for businesses in managing fleets. In the one-page article linked above, NAIC discusses the pros and cons of this approach for individuals. One frequently cited downside is the issue of privacy – some drivers just don’t like the idea of being tracked; others worry that collected data could be shared with or sold to third parties. Many state regulators are monitoring the privacy issue and requiring disclosure of tracking practices and devices.

Right now, if you talk about telematics and insurance, it is primarily an issue for auto insurance. But expect that some practices may also make their way into home insurance too. While there are still some barriers to adoption there – privacy being one – “smart technologies” or “the Internet of Things” mean that more and more home systems will be able to be measured and tracked. For more on this, see Smartest house on the block: Home telematics and their window for insurers.