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Katrina Cars: Lott Introduces Bill to Require  Information on Cars Resold  that are Declared a "Total Loss" from Insurance Companies

Column by Sen. Trent Lott   Filed 7/15/06 GCN

     When buying a used car, unless you know the previous owner well, you take a chance on what you’re getting.  If you can’t check the car’s history, you may not be able to determine whether it has been seriously wrecked or damaged. That’s particularly true today because an estimated half-million once flooded “storm cars” are circulating following Hurricane Katrina.  I’ve introduced a bill to protect consumers from folks deceitfully selling these damaged cars to unsuspecting buyers.

The “Consumer Access to Total Loss Vehicle Data Act” will make available to consumers information about automobiles declared a “total loss” by insurance companies.  The legislation directs the National Highway Traffic Safety Administration to make all insurers disclose information pertaining to total loss vehicles.  

The insurance company specifically must disclose the serial number or vehicle identification number (VIN), the date of the total loss declaration and a statement of the primary reason for declaring the vehicle totaled, such as water, collision, fire or theft.

If this bill becomes law, the insurers must make this information available to the public in electronic form, available by the internet and email.  Then consumers, auto dealers and even auto salvagers can better decide if they want to buy the automobile.  In fact, insurance companies will be required to make this information available for purchase by commercial companies that package and sell information to consumers, such as web sites offering vehicle history reports.

This legislation is particularly needed in Katrina’s wake, but it’s hardly a new problem.  Even without the influx of Katrina-damaged cars, thousands of wrecked, flooded or stolen automobiles are sold every year with clean titles to unsuspecting consumers.  This situation persists because many states’ motor vehicle title laws are confusing or incomplete.  Right now there is no single nationwide database which tags all problem vehicles.  In some states, including Mississippi, unscrupulous folks are able to practice “title washing” in which a car with a salvage title is reissued a clear title.

In past years I’ve tried to get stricter “title branding” statutes passed nationally to require that all major auto damage be reported on a car’s title, which is linked to the VIN.  It’s gotten a lukewarm reception from the insurance industry and others who frankly think it’s too much work.  I expect insurance companies will oppose this latest measure, too.

But flood-damaged cars are a large and growing problem.  On the surface, these cars may look just fine, but underneath the hood and dashboard there could be all kinds of problems.  Today’s automobiles are laden with complex electronics and computer systems very susceptible to moisture.  They don’t just “dry out.”  The damage may not manifest itself until after you’ve bought the car.

My legislation has the full support of the National Automobile Dealers Association (NADA) and most of the auto salvage industry.  I anticipate that many consumer groups will back this plan as well, particularly as my proposal makes its way through the legislative process.

The influx of Katrina-damaged cars on the market, particularly vehicles once waterlogged by flooding, requires better protection for dealers, salvagers and consumers.  Many of these cars may be perfectly fine, but buyers are entitled to truthful titles and complete information about the vehicle’s history.  Buying a car is a major purchase, and consumers should have access to all reasonable information about a car before buying it.  Katrina already has caused enough problems.  Let’s make sure innocent people looking for a dependable car don’t become Katrina’s latest victims. 


Senator Lott welcomes any questions or comments about this column. 

Write to: U.S. Senator Trent Lott, 487 Russell Senate Office Building, Washington, D.C. 20510 (Attn: Press Office) or Email

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