The economic damage from Superstorm Sandy could hit $50 billion, making it the second most expensive storm in U.S. history, ranking right behind Katrina, according to forecasting firm Eqecat.
The cost to insurance companies could range from a low of $10 billion to as high as $20 billion, and vehicles will account for a significant part of the loss. In fact, there is a potential that an estimated 80,000 to 100,000 vehicles from storm-affected states will be declared total losses. Unfortunately, there is also a chance that a lot of these total losses will resurface in the used car market. Here’s what you need to know now.
When water rises to the dashboard, reaching expensive and complex electrical parts, most insurers deem the car more expensive to repair than the vehicle is worth. The reasoning is that water will get into and corrode all electrical connections and damage vital engine and airbag components. Interior components like seats have padding that absorb the dirty flood water like a sponge, and once dried, retain the lingering odor of that water. Door panels and other nooks and crannies may not fully dry initially, causing black mold spores to grow. Unwitting buyers of flood vehicles from Hurricane Katrina wound up with vehicles that had continual electrical and drivability problems and exposed them to the potential health hazard of black mold.