The Expert Podcast

Well, it's been a couple months since Hurricane Ian and the other tropical storms have hit Florida, and we're already getting hundreds and hundreds of inquiries from potential customers who have vehicles they've purchased that have had a prior claim for damage from the hurricane. A lot of these end up with what's called a Certificate of Destruction. You can see that here on the screen. Because Florida calls these vehicles Certificate of Destruction—every state has a name for these vehicles. Some call it non-repairable, some call it junk, some call it parts only. In Florida, it's called Certificate of Destruction.

So we're already seeing hundreds of these. Matter of fact, we had a caller earlier today where they had purchased 14 vehicles from an auction, and it turns out that they had a Certificate of Destruction for each one of them. So what does it mean? What can you do with these vehicles? What can't you do with these vehicles? What are the requirements and restrictions on a Certificate of Destruction?

So this is not a title, even though it looks like a title. A Certificate of Destruction is a document issued by a government agency to declare that the vehicle is no longer eligible for road use. Where does that power come from? Well, in the Florida Statutes—I pulled it up on the screen—if certain conditions are met, and we'll talk about what those conditions are, the department shall declare the vehicle unrebuildable and print a Certificate of Destruction, which authorizes the dismantling or destruction of the vehicle. It doesn't authorize anything else other than destruction of the vehicle.

And you can see they take it pretty seriously because a person who knowingly violates this paragraph by selling, transporting, delivering a motor vehicle without making notifications—it's a third-degree felony. So again, we're not giving you legal advice—we're not attorneys—but you got to make sure you process these vehicles properly.

In fact, here's a key part of the language of the titling authority. So they talk about all the different ways you can get a title for a vehicle, all the different processes. But it says: nothing shall be applicable if a Certificate of Destruction has been obtained. So everything as far as titles or methods or all the rules for getting a title to a vehicle— all out the window. Nothing shall be applicable if a Certificate of Destruction has been obtained for the vehicle.

So why do this? Why have a Certificate of Destruction? Well, the reason why is because if an insurance company who pays a claim has any reason that they don't want this vehicle to be out on the road, they're going to put a Certificate of Destruction. And the reason why is because even if the vehicle is in perfectly good condition, if later it's discovered that something goes wrong with the vehicle—maybe the brake line rusted out because it was corroded, maybe it wasn't damaged at the time of the flood or the accident—but if a year or two later that brake line rusts out, the brakes don't work, somebody crashes, they get hurt—they're going to go back and sue the insurance company who paid the claim back when the car was originally damaged or totaled.

What if the airbag sensor gets corroded and doesn't go off? Somebody gets in a crash, the airbag doesn't activate properly. Well, when the person gets hurt, they're going to go back and sue the insurance company that says, "Look, you should have never let this car go back on the road." That's why they put the Certificate of Destruction on vehicles that seem to be in good condition.

So we're already getting hundreds of calls every single day from people who are looking at these cars or buying these cars. These cars are showing up at Copart, IAA, all the other auctions. Even if the car looks like it's in good condition—obviously a flood vehicle doesn't have a lot of physical damage, like the fenders aren't crushed or broken or crashed—you may smell some mildew or some funky smells, or maybe the carpet has stains on it. But a lot of times, people look at these flood vehicles as very good candidates for flipping cars.

Be aware that if it is a Certificate of Destruction, it is no longer eligible for title or registration in any state, because it's shared between the different states. So check out our website for more information, but be aware that thousands of these cars are already showing up in the marketplace, and you want to make sure you don't get stuck with one.