Various parts of the U.S. continue to recover from the widespread impact of Hurricane Helene and Hurricane Milton and the damages they caused. As a coastal state, parts of New Jersey will continue to experience exposure to flooding. Whenever possible, exposed dealerships should identify the steps needed to prevent catastrophic loss of property and inventory before flood damage occurs. After a flood event, all dealerships should also heighten their inspection process when purchasing or accepting used vehicles in trade. Diligence in this area will ensure that a used car or light truck for purchase or trade has not suffered flood damage.
Stormproof Inventory and Protect Your Dealership
Create an emergency relocation plan that includes preparation for flooding. A few common risk management strategies a dealership can take to prevent flood damage include:
- Leasing (or building) a location at a higher elevation: Relocating dealership inventory to a higher elevation outside of a known flood zone will offer the best protection from damage. For example, a parking garage could serve as an ideal location.
- Practicing how to execute emergency relocation: If your dealership, or any off-site vehicle storage lots, are exposed to flooding, execute a pre-flood emergency relocation process. Conduct pre-tests semi-annually and before seasons when flooding could occur. Effective relocation procedures may include monitoring the weather and identifying who, what, when, and where to relocate property safely. Pre-relocation tests help employees become familiar with the process, reveal possible obstacles that hinder relocation, and help dealers prevent large financial losses.
- Protecting inventory keys: Make sure to keep track of each vehicle’s keys throughout the relocation process so that both keys and vehicles are easily paired after the storm ends.
- Keeping the property clean: Loose items around the property can get picked up by severe storms and damage property. Removing these items lowers the risk of damaging inventory and dealership.
Evaluate Risks- review contracts and any available insurance coverage with legal and insurance professionals.
Dealerships exposed to flooding should review all contracts with their legal and insurance professionals to identify the extent of their financial responsibility and assess what they can do to protect their dealership. Insurance carriers typically exclude flood coverage, and changing weather conditions mean flood zones continue to expand. Many dealers may need to purchase open lot coverage that includes insurance for flash flooding. However, this coverage may not even be available. If this coverage is unavailable, dealers could also obtain some coverage through the National Flood Insurance Program (NFIP). Even if insurance carriers do not cover flood damage, they will likely raise property insurance rates if they insure property in a high-hazard area. Knowing what disaster events trigger property damage coverage and what events do not trigger property damage coverage is critical to dealerships since they have expensive owned and unowned physical assets exposed to damage that may have little or no insurance.
Post flood Practices:
Vehicles that have been flooded can be cleaned up from the outside, but once a vehicle has been submerged in water, signs of water damage remain on the inside. Here are a few common ways to determine if a vehicle has been involved in a flood.
- Oil Dipstick: Flooded vehicles could have water mixed in with the oil.
- Cylinders: Check cylinders for rust and corrosion.
- Engine: Check the engine for signs of mud and rust. Muddy water can seep into engine seals in a matter of hours if submerged.
- Electrical Components: Electrical wiring is the most vulnerable to water damage and should be checked for rust.
- Headlights & Taillights: It’s easy for water to get behind headlights and taillights.
- Under Carpeting & Upholstery: No matter how well someone cleans up a flooded vehicle, there is always a chance of mold appearing, especially under the carpeting under car seats.
- Tire Well in Trunk: Check for water that can pool in the low point of the vehicle.
It’s important to always remember that even if New Jersey hasn’t experienced recent flooding, there’s always a chance vehicle’s with flood damage can find their way to the Garden State.
Be sure to protect your dealership from future storms by putting an emergency plan in place and closely inspecting any used vehicles your dealership intends to purchase or take in trade.