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Claims about vehicles damaged by flood untrue



Published: Fri, November 9, 2012 @ 12:00 a.m.

Associated Press

DETROIT

In the days since superstorm Sandy, an alarming prediction has flashed across the Internet: Hundreds of thousands of flood- damaged vehicles will inundate the nation’s used-car market, and buyers might not be told which cars have been marred.

Not true, according to insurance-claims data reviewed by The Associated Press. The actual number of affected vehicles is far smaller, and some of those cars will be repaired and kept by their owners. The dire predictions are being spread by a company that sells vehicle title and repair histories and by the largest group representing American car dealers.

They claim the number of cars damaged by Sandy could be larger than when Hurricane Katrina hit the Gulf Coast in 2005 and marred more than 600,000 vehicles. But an AP analysis of claims data supplied by major insurance companies shows the number of cars reported damaged so far is a fraction of that.

The companies — State Farm, Progressive, New Jersey Manufacturers and Nationwide — have received about 31,000 car-damage claims.

“It’s not anything near what we’re talking about in the Katrina situation,” said James Appleton, president of the New Jersey Coalition of Automotive Retailers, a statewide association of more than 500 dealers.

Frank Scafidi, a spokesman for the National Insurance Crime Bureau, an insurance-company group that monitors fraud and other trends, concurred, saying insurers watched by his group are logging far fewer claims than they did with Katrina.

“It doesn’t translate to there’s going to be 2, 3, 400,000 cars out of this thing just because this is such a huge geographic storm,” Scafidi said.

Other large insurers, such as Farmers, Allstate, Geico, Liberty Mutual and USAA, either did not return calls or declined to release claims information.

Because many communities still are cleaning up from the superstorm, more claims are bound to come in. But the total is not likely to grow significantly. Ten days after Sandy, the rate of claim submissions already is starting to slow. And many of those cars will have relatively minor damage unrelated to water, meaning they can be fixed and returned to their owners.

About 14,000 new cars also were damaged by Sandy while they sat on docks in the New York area awaiting shipment to dealers. But most of those vehicles won’t end up on sales lots. Automakers will have severely damaged cars crushed because they don’t want their brand name hurt by substandard vehicles circulating in the marketplace.


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