This blog just wrote yesterday about the havoc that Superstorm Sandy has wreaked on the insurance market. People have had to suffer through endless delays in getting the money that they deserve to help them get back on their feet. What many may not think about is the damage the storm had on several businesses, which may have also lost a ton of property.
Fisker Automotives, an electric vehicle manufacturer, knows about this first hand, because it lost 338 of its expensive vehicles in the storm. And to make matters worse, its insurance company denied a claim to cover the $33 million in damages done to the fleet of cars.
Fisker has filed suit against the insurer, XL Group Plc, over the denial. In its court filing, Fisker said that it paid for up to $100 million in coverage from storms such as Sandy. The filing said that the company filed its claim in a timely matter only to have it denied. The lawsuit requests that the policy covers the losses and also seeks damages of an unspecified amount for breach of contract.
An attorney with the firm representing the maker of the plug-in hybrid Karma said that the insurance company is arguing over whether the cars could be specified as "in transit." When the cars were destroyed they were sitting in a lot waiting to be shipped to dealers.
Many times insurers will try to string out the process to avoid covering large amounts of damages. And a storm like Sandy that caused tens of billions in damages likely means the company has to cover more than just Fisker's losses. But that is the point of insurance. And if a company follows its policy, then it has a right to the money that it's policy allows.
Source: Reuters, "Fisker sues XL over hybrid cars wrecked by Superstorm Sandy," Jonathan Stempel, Dec. 28, 2012