The economic damage from Hurricane Sandy could hit $50 billion,making it the second most expensive storm in U.S. history, rankingright behind Katrina, according to forecasting firm Eqecat.

The cost to insurance companies could range from a low of $10billion to as high as $20 billion. Vehicles will be a significantpart of the loss. There is a potential that an estimated 80,000 to100,000 vehicles from storm-affected states will be declared totallosses. Unfortunately, there is also a chance that a lot of thesetotal losses will resurface in the used car market. Here's what youneed to know now.

The two major causes of total loss will be flooding and damagefrom falling trees. While falling tree damage can be easilyspotted, once flood damage is cleaned up, it becomes more difficultfor the unwary buyer to detect. Vehicles totaled out by insurancecompanies will most likely carry a “salvage” or “branded” titleindicating that the vehicle was declared a total loss. However, aprocess known as “title washing” allows unscrupulous car dealersand individuals to remove salvage branding from car titles tominimize their losses.

Titles are washed by transferring a salvaged vehicle to a statethat doesn't recognize the damaged title brand. When the stateissues a new title, it may no longer show that it had beensalvaged. If not, the seller will just keep moving it from state tostate until the branding is gone. Once that happens, the vehicle'shistory will have been “washed” clean.

What's Wrong with “Flood” Cars?

When water rises to the dashboard reaching expensive and complexelectrical parts, most insurers deem the car more expensive torepair than the vehicle is worth. The reasoning is that water willget into and corrode all electrical connections and damage vitalengine and airbag components. Interior components like seats havepadding that absorb the dirty flood water like a sponge, and oncedried, retain the lingering odor of that water. Door panels andother nooks and crannies may not fully dry initially, causing blackmold spores to grow. Unwitting buyers of flood vehicles fromHurricane Katrina wound up with vehicles that had continualelectrical and drivability problems and exposed them to thepotential health hazard of black mold.

Buyers, Beware

Car buyers can safeguard themselves from this scam by firstfinding out if the prospective vehicle was registered in one of thehard hit areas. Using the 17-digit Vehicle Identification Number(VIN), consumers can perform an online title search. This canalso help buyers determine if the vehicle has recently changedhands, or has several previous state titles, which could be anattempt to cover up the clues of flood damage. Of course, the bestthing consumers can do is have a qualified mechanic inspectthe vehicle for evidence of flooding. A mechanic will charge aninspection fee of $100 or more to disassemble key components andlook for evidence of water damage. That's inexpensive insurancethat could save you thousands in repair bills down theroad.

There are an estimated 36 million used cars sold each year, andmaking sure consumers (and insurers) don't get stuck with aflood-damaged car takes a little work. But, when you consider thata car is most likely the second largest purchase most of us willmake, spending a little money doing a title search or having amechanic do an inspection is money well spent.

Statements and opinions expressed in this article are solelythose of the author. They are not offered as and do notconstitute legal advice or opinion of Mitchell International,Inc.