Carriers Flooded With Auto Damage Claims from Hurricane Wilma

November 1, 2005

The “Insurance Village” established in Plantation, Fla. near Fort Lauderdale by the Department of Financial Services, had a lot of damaged vehicles in the lot, and many auto policyholders were seen in the parking lot showing the scratches and dents to insurance company representatives. Some damages were minor; others appeared like an entire tree had fallen on an automobile’s roof.

Automobile damages, caused by Hurricane Wilma, have brought a barrage of automobile claims to carriers, which could help make the hurricane one of the costliest storms in Florida history.

Another yet unreported factor, involves how many auto damage claims will be reported due to collisions at intersections at which, due to power outages, there were no traffic signals.

As of Monday, State Farm received more than 87,000 Wilma-related claims. Of those, more than 30,000 are automobile claims, State Farm spokesman Chris Neal told the Fort Lauderdale Sun-Sentinel.

“This is a huge auto event for us,” Neal said. State Farm is Florida’s largest insurer for both homes and automobiles.

Cars are covered for hurricane damage by the comprehensive portion of automobile insurance policies, if that comprehensive coverage was purchased, Sam Miller, executive vice president of the Florida Insurance Council explained. If a policyholder doesnâ??t have a comprehensive policy, the car won’t be covered for hurricane damage.

There are no hurricane deductibles on an automobile policy, as there are with homeowner policies. Whatever the deductible you have for comprehensive coverage would apply, Miller said.

Comprehensive auto coverage also will pay for flood damage to cars. Houses require separate flood policies.

It’s too early to tell how much Wilma will cost the insurance industry in losses. Some computer models estimate insured damage to cars and houses to be as high as $12 billion, but Miller said the council is using an average of four models that pegs damage at between $6 billion and $7 billion.

Better loss estimates should be available next week. But if current estimates stick, it would put Wilma on par with last year’s Hurricane Charley, a Category 4 storm that hit Florida’s west coast.

Claims are coming at a brisk clip for many insurers. State-backed Citizens Property Insurance Corp., which has the highest concentration of home policies in South Florida, had received 42,000 claims by Monday morning, company spokesman Justin Glover said. Of those, 18,000 were in Miami-Dade County, 12,000 were in Broward County and 6,000 were in Palm Beach County.

Nationwide Insurance Co. of Florida reported more than 10,000 Wilma claims, with the majority of those coming from southeast Florida, company spokesman Joe Case told the Sun-Sentinel.

Adjusters are visiting the most severe claims first. Companies aren’t reporting any access problems getting to damage areas, but adjusters are getting stuck in traffic and had difficulty refueling their vehicles, Miller said.

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