Katrina Vehicles Reenter Population

Up to 13,500 vehicles with titles branded as damaged by Hurricane Katrina have been moved to other states and now haw clean titles. Those vehicles were among 200,000 cars and trucks that were damaged when Katrina struck New Orleans and other parts of Louisiana, Alabama and Mississippi in 2005. The titles for these vehicles originally were branded as flood- or storm-dam aged.

A title brand refers to words on a vehicles title issued by a state motor vehicle department that identify its condition. Vehicles damaged by Hurricane Katrina may carry one of several brands, such as "Scrapped," "Junk," "Water Damage," "Salvage" or "Storm Damage-Katrina."

Approximately 20,000 to 30,000 of these damaged vehicles have since been moved to other state's, according to a recently released survey conducted by Experian Automotive. Of those vehicles, 45% were given new titles that do not indicate their flood damage, and that percentage may grow.

To estimate the scope of this trend, Experian identified 200,000 vehicles in ZIP codes affected by Hurricane Katrina with titles indicating they were damaged in the storm. Then it traced those vehicles that were moved out of state and calculated the number that were given clean titles.

The National Automobile Dealers Association (NADA) has indicated that 17 states do not record the "salvaged vehicle" title designations for out-of-state vehicles. They are: Arizona, Arkansas, California, Illinois, Indiana, Kentucky, Maine, Michigan, Mississippi, Missouri, New Jersey, New York, North Dakota, Ohio, Rhode Island, Texas and Vermont. Also, Minnesota does not carry forward "salvaged vehicle" designations for cars and trucks more than five years old.

Flood-damaged vehicles generally are worth only half as much as used cars and trucks in good condition. Unscrupulous rebuilders may repair salvaged vehicles, then obtain clean titles by moving them out of state, choosing those states that do not transfer the "salvage" designation from the titles of out-of-state vehicles. In some states, the rebnilders can obtain clean titles for rebuilt vehicles that pass an inspection.

In July 2006, Sen. Trent Lott (R-MS) introduced legislation to require insurance companies to help maintain a national database that identifies all vehicles the insurers have written off as a total loss. The information would be available to vehicle buyers. NADA endorsed the legislation, but Congress took no action. On Dec. 7, Lott said he would reintroduce the legislation with the new Congress.

Copyright Hearst Business Publishing Mar 2007
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