Beware of Damaged Cars from Katrina Washington DC September 28, 2005; The AIADA newsletter reported that insurance companies have issued a warning to consumers to be on the look-out for flood-damaged cars from Hurricane Katrina, unlikely to be insured, that may end up on the used car market, reports USA Today. "Many times after a very wet storm, we have to be careful about people trying to dry out cars and then sell them," says Bill Bailey, managing director of the Hurricane Insurance Information Center. But, this time, damage is so severe "that its going to be hard to disguise that the car came from Katrina." State Farm Insurance has already received 79,000 claims for cars damaged in Katrina and subsequent New Orleans flooding. Some vehicles were damaged by falling trees and debris; others were simply washed away and are missing. Those that were stuck underwater are covered in strange sediment and gunk that smells musty and funky, says State Farm spokesman Kip Diggs. The National Insurance Crime Bureau sent investigators to Baton Rouge and Mobile, Ala., to start a national registry of cars damaged by Katrina in an effort to prevent them from being resold.