Washington – If lawmakers such as Sen. Trent Lott, R-Miss., and Rep. Cliff Stearns, R-Fla., as well as the National Automobile Dealers Association (NADA) get their way, insurance companies will be forced to disclose total-loss vehicle claims information to the general public.   Thanks to catastrophic storms such as Katrina and the recent flooding in the Pacific Northwest, the public is more aware of the problem of flooded and totaled vehicles being resold to unsuspecting buyers. Lawmakers believe that a rule mandating disclosure of total-loss vehicles is one way to manage the problem.   In the 109th Congress, Lott and a bipartisan list of colleagues sponsored S.3707, the Passenger Vehicle Loss Disclosure Act, to require that insurance companies permanently red-flag totaled, flooded or stolen vehicles. Rep. Stearns introduced a similar bill, H.R. 6093, in the House of Representatives.   Seattle-based PEMCO Insurance last month announced that it voluntarily reports cars totaled with flood damage to CARFAX, an auto database available to consumers. Other insurance companies are expected to evaluate their reporting procedures.   Sen. Lott also affirmed his plans to reintroduce legislation in the 110th Congress to reduce title fraud and title washing of insurance-totaled vehicles.   According to lawmakers, although an insurance company may declare a vehicle a “total loss” due to water damage, severe accident, theft, etc., these vehicles often are sold at salvage auctions. They are then rebuilt and re-enter the market with clean titles, so consumers, wholesale auto auctions and dealers may have no way to learn about the total loss.   The bill would require insurance companies to reveal the reason for the total loss (flood, collision, stolen, etc.), the date of total loss, the odometer reading on that date, and whether or not the airbag deployed.   The NADA-supported effort by lawmakers would permanently red-flag these vehicles, reducing the likelihood that the “total loss” vehicles will end up back on the street.   This federal legislation would not preempt state titling laws or require changes in state laws.   “With more than five million vehicles totaled by insurance companies just last year -- more than half a million of them coming from the Gulf Hurricanes of 2005 -- something has to be done to permanently notify consumers about these severely damaged vehicles," said David Regan, Vice President of Legislative Affairs for NADA, McLean, Va., was quoted as saying.    Sources: PR Newswire, Yahoo News, The National Automobile Dealers Association            

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