Irma: 215K vehicle claims flood insurers on top of record Harvey

In the same season Hurricane Harvey is smashing records for vehicle insurance claims, a report out today says Hurricane Irma has generated a hefty number of its own in Florida — more than 215,000.

More than 422,000 claims in Texas include massive numbers of vehicles taken to lots to be auctioned off for parts or scrapped, according to the National Insurance Crime Bureau. That blows past vehicle claims from Hurricane Katrina (about 300,000) and from Superstorm Sandy (250,500), says the Des Plaines, Ill.-based nonprofit organization funded by the insurance industry.

But Irma is not far behind with more than 215,000 vehicle claims in Florida, whether from flooding, wind-blown debris or other causes, the group says.

What does this mean for consumers? One issue to watch is flooded cars making their way to used-car lots or classified ads, NICB says.

While many flooded cars will sold for parts or scrapped, some unscrupulous merchants will buy a vehicle, clean it up, and take it to another state where they will obtain a “clean” title and sell it with no warning that it has been flooded, the organization cautions.

Consumers can check vehicle identification numbers but that won’t protect against all forms of shady dealing, such as cases where cars without comprehensive insurance to cover flood damage are cleaned up and sold without a record that they were flooded. Buyers should have cars checked out by a mechanic or watch for signs of water damage under carpets or in other places not easily visible.

Florida insurance commissioner David Altmaier told Florida’s Cabinet this week that “upward pressure” on homeowners’ rates is likely after the busy storm season.

Analysts expect increases in car insurance premiums as well, though how much is not yet clear.

Another matter is whether the record-breaking combination of storms puts financial pressure on insurers to delay or deny more claims than they normally might. Companies typically deny this, but groups including the Consumer Federation of America advise policyholders to be ready to challenge or appeal denials they believe are not justified.

Consumers with questions or complaints about insurance claims can contact Florida’s division of consumer services at (877) 693-5236.

 

ALERT: Whopping 500,000 cars flooded in Texas spark consumer warning

An estimated 500,000 cars in Texas have been flooded by Hurricane Harvey, which will cost insurers $4.7 billion to cover, financial analysts figure.

Florida is watching Hurricane Irma closely on its own doorstep, and Harvey provides a reminder to secure vehicles on ground as high as possible.

Human life and safety of course remains the most important consideration, but the ripple effects of devastating storms can play out for months or years.

Flooding in Texas is expected to cause $4.7 billion in car damage alone. (ABC News)

The National Insurance Crime Bureau is warning consumers that “vehicles flooded by Hurricane Harvey may soon be appearing for sale around the nation.”

The non-profit organization in Des Plaines, Ill. works with insurers to document which cars have been affected. Many cars are sold off for their undamaged parts, but others are likely to find their way to lots in other states.

Though Irma’s path remains uncertain, Florida will remain a large market for used vehicles as the third most populous state — and may even add to a soggy inventory for sale.

One precautionary move is to check the vehicle identification number online, including this database from NICB:

www.nicb.org/theft_and_fraud_awareness/vincheck/vincheck

Still, that does not cover all risks.

“Unfortunately, some of the flooded vehicles may be purchased at bargain prices, cleaned up, and then taken out of state where the VIN is switched and the car is retitled with no indication it has been damaged,” the crime bureau warned.

Officials suggest having a car checked out by a mechanic before purchase, and watching for trouble signs.

Want some tips to avoid buying a flood-damaged car?

Here’s one: Check for moisture, mildew and grime not just under carpets but also inside the seatbelt retractor.

Another: Check for rust on screws in consoles or places water normally does not reach.

Look for mud or grime in the spare-tire compartment.

See any white powder or pitting on aluminum and alloys? Think twice.

 

 

 

 

Houston airport closed through Thursday, 7,500 flights canceled

United Airlines expects its hub at Houston’s George Bush Intercontinental Airport to remain closed because of flooding until at least noon Thursday, creating a cascade of 7,500 cancellations and counting and forcing travelers to make new plans across the country including South Florida.

With Labor Day weekend approaching, at least 20,000 passengers on cruise ships have been stranded at sea or sent to ports away from Texas, including some to Miami.

“Obviously it’s been disruptive,” said Jason Schreier, CEO of the Miami-based U.S. headquarters for APRIL Travel Protection, which services more than half a million travel policies a year. “We’ve had a lot of calls. United is the airline with the most issues.”

Weather events such as a hurricane are generally covered by travel insurance, though policy details vary and consumers have had to scramble to make sure they were covered and arrange new plans, he said.

More than 7,500 flights have been canceled since Friday, nearly all as a result of Hurricane Harvey and its aftermath.

On Tuesday alone, more than 1,500 flights had been canceled by mid-afternoon.

Palm Beach Travel president Annie Davis said she checked with clients in Houston, including a family with triplets, just to make sure they were OK. They often travel to South Florida and the Keys, a task made difficult enough by family logistics and the need to arrange that many seats together.

“Now throw a hurricane into the mix,” Davis said. “We certainly understand what that is like here in Florida.”

The initial storm seemed manageable, the family reported, but the rain kept coming, and roads around their community became flooded, she said. They are grateful to be safe at last check, but any travel they undertake soon likely will mean getting to another airport such as in Dallas, she said.

Houston is the second biggest hub for United, with more than 33 million passengers flying through it on the airline every year, or about 91,000 people per day. The airline has offered to waive certain fees related to changing flights in the affected region into September.

“United is continuing to monitor the weather and conditions in Texas, and will make updates and announcements on its Twitter handle @United and on united.com,” an airline statement said.

After United, the airlines with the most cancellations Tuesday were Southwest, ExpressJet, Mesa, Republic and Spirit and American.

 

Texas flooding: What isn’t covered, and why it matters to Florida

Early estimates put the damage from Hurricane Harvey at up to $30 billion, with flood, not wind, as the major source of harm — and industry officials expect less than half the flood damage will be covered by insurance.

“For our own book of business, maybe one in four of our homeowners actually selects the Flood Insurance Program,” Farmers Group CEO Jeff Dailey told CNBC . “I think you’ll see an awful lot of uninsured losses.”

Flooding in Texas is expected to cause tens of billions in damage. (ABC News)

The loss of at least eight lives matters more than money, but scenes of highways and homes under water bring a harsh reminder to Florida: Standard homeowner policies do not cover floods. Unless a mortgage lender makes a homeowner buy flood insurance because the property is in a high-risk zone, it’s up to the consumer.

Harvey will likely rank among the top 10 most expensive U.S. storms with $10 billion to $20 billion in losses covered by insurance, JPMorgan analyst Sarah DeWitt said. That doesn’t count uninsured losses or economic damage, such as closed businesses, not covered by a policy.

But only $1.2 billion to $2.3 billion in damage will come from winds and storm surge, AIR Worldwide estimated. The Verisk Analytics business noted that does not include the impact of “ongoing torrential rain and catastrophic flooding from Hurricane Harvey’s unprecedented precipitation.”

If a storm blows your roof off and water pours in from above, your standard homeowner policy typically covers it. If water gets to the ground and a river or canal overflows and the water rises into your house, that’s generally covered by a flood policy — or not necessarily covered if you don’t have one.

Federal disaster aid, if granted, can cover some emergency housing and repairs, but is not designed to return a home to its original state, the Federal Emergency Management Agency says. In some cases homeowners can apply for government loans that must be repaid.

“FEMA does not pay to return your home to its pre-disaster condition,” the agency says. “FEMA provides grants to qualified homeowners to repair damage not covered by insurance, but these grants may not pay for all the damage.”

How do you buy it? Some private companies have begun underwriting flood policies, but most policies come from the government’s National Flood Insurance Program. Your insurance agent can help you buy it, or try the NFIP’s call center at 1-800-427-4661 to request a referral.

Florida’s insurers have begun working to offer more flood options. Florida Peninsula Insurance Co. based in Boca Raton said last week it has begun offering flood insurance coverage as a potentially less expensive “endorsement” on a home policy rather than a stand-alone flood policy. The flood coverage is ultimately provided by NFIP or a private partner such as a Lloyd’s of London affiliate, company officials said.

Florida has more of the nation’s 5 million flood policies than any other state, close to 40 percent. Still, hundreds of thousands of Florida buyers with a choice — meaning not required by a lender — balked and let policies lapse in recent years after Congress aggressively raised costs for many in the program. Congress is working on reauthorization of the flood program, and an overhaul of the rates, in September.

New flood maps effective in early October are bringing anxiety about changes to more than 50,000 properties in Palm Beach County. County officials cautioned changes can mean a piece of the property is in or touches a flood zone, not necessarily that the house itself costs more to insure.

There were more than 100,000 flood policies in Palm Beach County as of March 31, including more than 66,000 in unincorporated areas, nearly 15,000 in Boca Raton, more than 9,000 in Boynton Beach, and more than 7,000 each in Jupiter, Palm Beach and Delray Beach.

While you’re checking on flood insurance, how safe is your property insurer? Consult the The Palm Beach Post’s Insurance Explorer for financial safety ratings and complaint information about more than 100 property insurers in the state.