Texas vehicles damaged from floods, may end up at Auction

During the rainstorms in late May, many Texans braved the roads and drove their vehicles in flooded streets, but some may now be regretting that decision and have been left with water-damaged automobiles.

Many of those water-damaged vehicles have been condemned to salvage yards, but some experts say many can end up back in the market.

The National Insurance Crime Bureau, insurance companies and local auto repair shops are warning those considering purchasing pre-owned vehicles to take a closer look into a vehicle’s history and have shared tips on how to identify vehicles potentially damaged by water.

Vehicle water damage in Texas

According to the National Insurance Crime Bureau and estimates from Copart, about 7,000 to 10,000 insured vehicles in Texas sustained water damage. Copart is a company that works with insurance companies to handle vehicles damaged in catastrophes.

Mark Hanna, Insurance Council of Texas spokesman, said having that many vehicles with water damage from rainstorm flooding is significant.

“That’s quite a few compared to a hurricane like Katrina or Superstorm Sandy, which had tens of thousands of vehicles submerged; it doesn’t rank up there, but as far as just some thunderstorms producing a lot of rain and freshwater flooding, this is pretty substantial,” Hanna said. “This is hundreds of millions of dollars.”

Chris Pilcic, State Farm spokesman, said auto damage claims from Texans rolled in by the thousands during the last weeks of May.

“During the storm event with dates of customer loss between May 23 and May 30, State Farm received more than 6,500 auto claims with the majority of damage being flooded cars,” Pilcic said. “The hardest-hit areas include Houston, Austin, San Antonio, Corpus Christi and San Marcos. About 90 percent of its customers’ cars reported damaged were damaged so badly, they couldn’t be driven.”

In May, Lubbock received 12.12 inches of rain, according to the National Weather Service in Lubbock, which caused flooded streets and some damage to vehicles.

Josh Page, Christian Brothers Automotive general manager, said during Lubbock’s flooding the auto repair shop, at 6207 82nd St., worked on about 40 vehicles that sustained water damage and had some that were declared totaled.

“We typically move out of here every week between 120 to 140 vehicles, so that’s 40 added to our normal car count,” Page said. “It’s just a product of people being on the road and traveling at the time that it rains that much and with the drainage (system) here in Lubbock people get in a sticky situation pretty quickly.”

Hud Huddleston, the owner Hud’s Auto Service at 8212 Valencia Ave., said about six water-damaged vehicles his staff worked on from the May flooding were also totaled. He said vehicles are declared totaled based on the “value of the vehicle versus the amount lost.”

“Most of the ones we saw water was sucked up into the engine and that damaged the engine,” Huddleston said. “They were a higher cost to repair than what the vehicle is worth.”

The fate of water-damaged vehicles

Most vehicles that are submerged in water are declared totaled by insurance companies, and in turn the insurers pay the owners who have comprehensive insurance coverage the actual cash value of the vehicle. The insurance companies then sell water-damaged vehicles to salvage companies.

“They have contracts with these huge salvage facilities,” Hanna said. “At that point, the salvage company puts on the title of that vehicle that it has been totaled and normally it will explain how it was totaled. The salvage companies normally auction these vehicles off. Most of the people who are buying these vehicles with the salvage title now on this vehicle are auto parts companies.”

Hanna said most vehicles that have been submerged in water typically have “perfectly normal” body parts that can be sold, but said sometimes water-damaged vehicles can slip through the cracks and wind up on a pre-owned car lot.

“I’m sure there are people out there that can go throughout the entire vehicle and take all of the water out and make it look new,” he said.

In Texas, it is illegal for used-car dealers to not tell potential buyers about a vehicle that has been declared totaled.

“The used-car dealer has to tell their perspective buyer that this has a salvaged title on the vehicle,” he said. “You are buying a car that was once declared totaled. If you buy that car, you’re on your own. There is no telling what may be wrong with it.”

Kristen Freis, Allstate Insurance spokeswoman, said most insurance companies discourage people from purchasing a vehicle with a salvaged title.

“We want everyone to always be prepared and be aware because buying a flood-damaged car can cost a fortune in repairs,” Freis said. “They can be really dangerous on the roads.”

How to avoid flood-damaged vehicles

Hanna said there are many indicators to look for when a vehicle has water-damage, and potential pre-owned automobile shoppers need to keep an eye out for them.

“They should look inside for any type of possible rust, mold or mildew,” he said. “If any vehicle has been submerged there is going to be water in the engine, throughout the vehicle and upholstery and the electrical system — that’s why insurance companies total a vehicle.”

Fries said shoppers for pre-owned vehicle should have a vehicle inspected by a mechanic before purchasing it, and said a vehicle’s history can be checked through services like the NICB VINCheck service, which will show if a car has been damaged in a flood, stolen or declared as salvaged.

“It’s critical that you know what to look for when you are buying a used car and how to check flood damage,” she said. “Allstate encourages Texans to always take a car in for a pre-purchase inspection by a trusted mechanic before buying a used vehicle and check on the vehicle’s history.”

Page said Christian Brothers is always willing to inspect pre-owned vehicles for its customers.

He said their shop hasn’t come across a pre-owned vehicle that was being sold with water-damages, but said he does warn customers about the indicators of a flood-damaged vehicle.

“We do talk to customers and tell them what are some things to look for when buying a vehicle and what are some signs,” he said. “Water causes corrosion around electrical components so you can look for that green or turquoise color. If you open the door of a vehicle that has had water inside it’s going to smell like molded carpet so it has that musty smell inside if it’s never been cleaned.”


2015-07-20T11:57:36+00:00By |Categories: Auction News|Tags: , , , |

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