Insurance Insights

A surprising way hurricanes in the US affects Canadians

Hurricane Harvey

With the natural disasters that have struck the United States and the Caribbean in recent months, the devastating, lasting impact on local communities is apparent. A recent article in Insurance Business Magazine identifies one of the trick-down effects from these catastrophes that can affect people at much greater distances.

Among Canadians looking to buy second hand vehicles, many end up buying from the States. In the wake of Hurricane Harvey and Irma, it’s estimated there were over 1 million vehicles damaged. Prospective buyers from Canada may be unknowingly buying flood-damaged used cars. It is recommended that anybody looking to buy a vehicle from south of the border thoroughly look into the its history. The Registrar of Imported Vehicles deems flood or water-damaged vehicles to be non-repairable or junk. Canada’s border control will not permit these ‘non-repairable’ vehicles to enter the country. This could mean huge losses for a Canadian buyer.

Another risk that prospective car buyers need to be aware of is the potential that some of the flood-damaged vehicles may have entered into the used car market in Canada.  Previous owners may not have filed insurance claims and instead just chose to sell them without disclosing the damage. In that case, even those car buyers who do their homework may be unknowingly purchasing one of these vehicles.  Water damage can lead to unpleasant, costly surprises down the road such as corrosion, mould and other toxins as well as features malfunctioning.

Anybody looking to buy a vehicle from the US should look up its record on CarProof or Carfax and have the vehicle inspected by a certified automotive technician if possible. There are some visible signs of water damage that can be identified via an inspection such as damp or musty odours, rust or mud.

For information and resources on insurance and risk management, please contact us.

Source: “Warning: US hurricanes can impact Canadians in most unexpected way” by Bethan Moorcraft, Insurance Business Canada (November 14, 2017).

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