Hurricane Ian flooding leads to increased risk of fraud, experts warn

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Hurricane Ian flooding leads to increased risk of fraud, experts warn

Hurricane Ian flooded an untold number of vehicles when it hit Florida and other southern states last week, and experts warn of the heightened risk of fraud as cars may appear for sale across the U.S. with no disclosure of the damage.

The National Insurance Crime Bureau NICB, a nonprofit that works to combat and prevent insurance crime, says that scammers will try to buy up water-ravaged cars and resell them as undamaged vehicles in the wake of major flood events.

It is too soon to know how many cars were damaged in Hurricane Ian, but the risk of fraud could be greater than ever after the deadly storm, as it is too soon to know how many cars were damaged by the hurricane.

We anticipate a lot of vehicles to be cleaned up and resold in the state of Florida or probably in other states, which is very common, NICB president and CEO David Glawe told FOX Business, pointing out the high demand and low supply of vehicles in the U.S. market.

Glawe said that selling flooded-out cars is an attractive scheme for crooks, because of the fact that the cost of used vehicles has gone up nearly 40% since 2019.

He noted that the market is good, and this is just another opportunity for criminal enterprises to pay for these vehicles in Florida that have been lost, and then ship them up and resell them in other states. The NICB says consumers should be on the lookout for hidden flood damage when shopping for used vehicles by checking for signs of water damage on vehicle carpeting, upholstery or seat belts. Other red flags are rusty screws or other metal parts, mud or signs of submergence in the engine department or under the dashboard, and any problems with the operation of electrical components.

A buyer should enter a vehicle identification number VIN into the NICB's VINCheck database to find out if a car was declared as salvage or total loss due to flooding. If a claim is turned in to an insurance company, there will be a record.

Those vehicles that are uninsured at the time of damage will not have documented evidence in the VINCheck system and can therefore be cleaned up and sold by unscrupulous owners without disclosing the damage. Some scammers may even sell such vehicles in states that are not close to Ian's path of destruction, where buyers may be less likely to suspect flood damage.

More than 422,000 vehicles were reported damaged in 2017 due to Hurricane Harvey and more than 215,000 from Hurricane Irma, according to the data released by the NICB. A quarter-million vehicles were damaged by Hurricane Sandy in 2012 and approximately 300,000 from Hurricane Katrina in 2005. The numbers include claims made to insurance companies.

The organization estimates there will be $6 billion in criminal fraud committed in Florida in the wake of Ian.

He said that we're not at the level of Katrina, but this will be the largest event in Florida history.