Intended to keep “lemons” off America’s roadways, the Louisiana House has approved a bill that would require vehicles totaled by water damage during Hurricanes Katrina and Rita to be destroyed.
House lawmakers meeting in special session voted 71-33 Monday, Nov. 14, to approve a one-of-a-kind bill that would require any vehicle totaled by flood to receive a newly created “certificate of destruction” and be crushed or dismantled. The bill – HB11 – now heads to the Senate for further consideration.
Existing Louisiana law requires flooded vehicles to receive a “salvage certificate” and that the damage be noted on the titles.
Bill supporters said if the 300,000 waterlogged vehicles from the recent storms re-enter the market, buyers could face unscrupulous salesmen and major vehicle trouble.
“I’ve been in the automobile business 26 years,” Rep. MJ “Mert” Smiley Jr., the bill’s sponsor, told The Associated Press. “People will take advantage of times like this.”
Damaged vehicles would have their frames and electrical systems crushed while certain parts could be refurbished or resold.
Representatives from the insurance industry opposed the bill during a recent hearing. They said it would likely cause premiums to rise for consumers.
State Farm, the largest auto insurer in Louisiana, has paid claims on 30,000 vehicles and expects to collect up to $48 million from companies that would resell reconstructed vehicles, Claims Manager Ken Moore told lawmakers before a panel that voted last week to advance the measure.
Moore said without the resell option, insurers would recover substantially less.
Smiley, R-St. Amant, said only vehicles that are more than 75 percent ruined by a natural disaster declared by the governor or president would be covered under the measure.
Anyone who fails to abide by the rule could get up to six months in jail and/or up to a $5,000 fine, as well as at least eight hours of community service.
A related bill would allow the disposal of vehicles that are a total loss due to damages from a gubernatorial declared disaster or emergency to be disposed of through the Louisiana artificial reef program.
The bill – HB129 – is in the House Commerce Committee.