Thousands of vehicles have been flood damaged in the Northeast, and Property Casualty Insurers Association of America recommends staying informed on relevant federal and state laws. “Like any total loss vehicle, the vast majority of insured vehicles will be disposed of via salvage auctions and branded as flood damaged or salvage according to the title laws of the state,” said Bob Passmore, PCI’s senior director, personal lines.
A vehicle damaged in a flood should have its title branded, but inconsistencies in state laws sometimes allowed titles to be “washed” or have their brands removed when transferred in another state. But there have been several recent developments that make “title washing” much more difficult. The National Motor Vehicle Title Information System requires insurers to report total loss vehicles to a federal data base; it also requires states to share information on motor vehicle titles. Insurer reporting has been in place since 2009 and subject to a $1,000 per vehicle fine for non-compliance. There are no penalties for states that haven’t complied, but 32 states are fully participating in NMVTIS, meaning that they both supply title data and query the data base on every title transaction. New York, New Jersey, Virginia, Connecticut and Delaware fully participate. Another eight states provide data only, and 10 states plus the District of Columbia are currently in development.