Thursday, 16 January 2014
As the flood waters recede the clean up begins, engineers, claims staff and colleagues have all been on the phone in recent days asking my opinion on flood damaged vehicles.
Here are my thoughts.
Before going any further, assess the type of water and the water level inside the vehicle.
Salt water, if it got inside the vehicle, then the only option is to break the vehicle
Fresh water (and given the volume of flood water any contaminants will be so diluted that there will be very limited risk of contamination), if the water reached airbag level then break the vehicle, but if it was low level flooding then consideration can be given to selling the vehicle as repairable salvage.
Good engineering practices must be used at all times to assess flood damaged vehicles, taking into consideration the age of the vehicle, type of construction, major component damage, possible electrical issues, and if any of the Supplementary Restraint Systems (SRS) components have been flooded.
Most of these vehicles will appear relatively undamaged to the casual observer and they are ripe for fraud, so great care must be taken when selling flood damaged vehicles - specially category B cases.
The ABI Code of Practice for Motor Salvage states that Category B (break only) vehicles should be dismantled and destroyed, however we see many of these vehicles being sold to overseas customers at prices that UK customers cannot afford, and this raises many questions.
How can a customer in Eastern Europe afford to pay so much for these vehicles and make a profit?
Are these customers being audited to ensure the vehicles are dismantled and destroyed?
What is actually happening to these vehicles?
This is a serious concern because we are talking about the safety of driver and passenger. If these vehicles come back into use, or sections of the vehicle are used to repair another, or SRS components are re-used and fail to work correctly if the vehicle is involved in another accident, then who is liable for the death or serious injury of the driver and passenger of the vehicle?
I don’t have the answer, but I believe that all Insurance Professionals should be concerned about this and I suggest that there is possibly a Duty of Care on UK Insurers to audit these vehicles to ascertain compliance to Terms and Conditions of purchase, ABI Code of Practice etc.
It only takes one vehicle to hit the headlines and there could be a knee-jerk reaction that will have a negative impact on the Auto Recycling industry.