Katrina May Leave a Trail of Lemons for Car Buyers

September 27, 2005

Special insurance industry teams are reportedly assisting law enforcement and insurance companies in identifying and cataloging vehicles damaged by Hurricane Katrina to prevent their fraudulent resale to unsuspecting consumers in the future.

Robert Bryant, president and CEO of the National Insurance Crime Bureau announced recently that he dispatched special catastrophe teams to Baton Rouge, Louisiana and Mobile, Alabama. The effort is expected to last from six months to a year.

Authorities estimate that thousands of vehicles have received damage from flooding in the New Orleans area alone. That number is expected to grow as claims from Mississippi are processed.

Bryant explained that unscrupulous salvage operators and dealers often try to conceal the fact that vehicles have been damaged by a natural disaster from potential buyers.

“By creating a registry of damaged vehicles now, the potential for this type of fraud can be greatly reduced,” he said.

In addition to vehicles, NICB is also alerting disaster victims to be aware of the potential for fraud that exists as efforts to repair and rebuild get underway.

Bryant said, “Fraud is an unfortunate reality in post-disaster environments. For example, NICB and its insurance and law enforcement partners in Florida have pending investigations as a result of unscrupulous contractors who scammed victims and insurance companies in the aftermath of last year’s four hurricanes.

“So too, as the initial recovery from Hurricane Katrina begins, there are people right now who are planning to converge on this area in order to obtain from disaster victims what little they have left or what they are entitled to from their insurance coverage,” Bryant added.

* Editor’s note: See related story in Texas/South Central news.

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