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Car Dealers Claim Insurers are Halting Policies Ahead of Hurricane Irma

Florida-area car dealerships are annoyed that insurance companies pulled the plug on policies earlier this week, fearing further hurricane-related payouts as Hurricane Irma approaches the coast. Insurers, including Progressive and Allstate, are reacting to losses incurred in Texas during Hurricane Harvey’s assault last month.

While this is standard practice for some companies, it isn’t a universal trend. State Farm, for example, said it would continue offering coverage until after a national hurricane advisory had been issued. 

“If you take us out of business for a week before a storm even hits and maybe a week after, you can imagine the impact, not just on consumers who are inconvenienced but the state’s economic resources,” Ted Smith, the president of the Florida Automobile Dealers Association, told Bloomberg.

“I’m urging through our public officials that they talk to these insurance companies and make sure they follow the policy of State Farm — wait until there’s imminent danger before you stop writing cars.”

According to capital markets firm FBR & Co., insurance companies may be looking at over $10 billion in claims stemming from Harvey — which was a Category 4 storm at landfall. Irma is now a Category 5 and one of the most powerful hurricanes ever recorded. Early estimates believe she could be capable of causing $130 billion in damages in the United States.

April Eaton, a spokesperson for Allstate, said the company issued a property and auto moratorium in 23 Florida counties this week. Progressive also verified it had stalled new policies in the state but was less specific on the regions affected.

Barry Frieder, the president of Miami-based car dealership Potamkin Automotive, said insurers stopped writing policies Tuesday. “We’ve kind of been out of business since yesterday,” Frieder explained.

Ideally, Florida dealers aren’t hunting for sales in the final days leading up to Irma’s landfall and are evacuating instead, but it’s easy to sympathize with their plight as the storm looms. Hurricanes can be very bad for business. Harvey reduced the seasonally adjusted rate of U.S. auto sales in August by as much as 400,000 vehicles. Projections before the storm hinted that the industry could have its first monthly sales gain for the year. With Irma expected to further suppress deliveries, the prospect of the auto industry bouncing back in September looks bleak.

This post first appeared on thetruthaboutcars.com

The post Car Dealers Claim Insurers are Halting Policies Ahead of Hurricane Irma appeared first on VWVortex.



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