WASHINGTON--Insurance companies will be required to send monthly data to a federally regulated database reporting vehicles they have classified as total losses, under a new regulation effective April 1.
The rule implements a law passed as an anti-fraud measure to prevent cars that had been declared total losses and sold for scrap from being retitled and later sold as working used cars by unscrupulous dealers.
Known as "title washing," the issue gained prominence in 2005 after cars that were declared total losses after Hurricane Katrina flooding were retitled in other states and resold without mention of their provenance.
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