Hurricane Harvey: Auto Insurance Companies Impacted And Their Response

Hurricane Harvey, which made landfall in 2017, was one of the worst natural disasters in US history, dumping 27 trillion gallons of water on Texas and causing massive flooding. The storm destroyed hundreds of thousands of vehicles in the Houston area alone, leading to a surge in auto insurance claims. This paragraph introduces the topic of auto insurance companies affected by Hurricane Harvey, focusing on the impact of the hurricane on vehicles and insurance claims in the region.

Auto insurers brace for impact as hundreds of thousands of claims come in

Hurricane Harvey, a Category 4 storm, brought unprecedented flooding to the Houston area of Texas, affecting hundreds of thousands of vehicles. Auto insurers were already struggling before the hurricane hit, and the impact of the storm is expected to be huge for the auto insurance market.

Insurers received at least 100,000 claims for cars impacted by Harvey, with that number expected to climb as high as 500,000. Seventy-five per cent of the initial claims were for totalled cars. The hurricane destroyed more vehicles than any other natural disaster in US history, with an estimated 300,000 to 500,000 vehicles in the Houston area alone becoming total losses. This is far more than the number of vehicles destroyed by Hurricane Katrina in 2005 and Hurricane Sandy in 2012.

The impact of the storm on the auto insurance industry is expected to be significant. While the big, household-name auto insurers are expected to be able to absorb the losses, smaller companies may struggle. The storm has also delayed the first projected increase in year-over-year new car sales in 2017, with 20,000 to 40,000 sales delayed in Texas.

The flooding caused by Harvey left many people without cars, as water damaged engines and electronics. The salt in the water is extremely corrosive, causing further issues for vehicles. Many people with damaged vehicles did not have the correct insurance to cover the damage, as Texas drivers are not required to have comprehensive auto insurance. Those with comprehensive insurance should receive a payment based on the replacement value minus depreciation.

The process of filing a claim with auto insurers after the hurricane was challenging, with long wait times and delays in processing. People were advised to act quickly and to gather as much documentation and photographic evidence as possible to support their claims.

Comprehensive insurance covers flood damage, but not all Texans have it

Hurricane Harvey caused extensive damage to vehicles in Texas, with hundreds of thousands of cars likely destroyed by the storm. While comprehensive auto insurance policies do cover flood damage, not all Texans have this level of coverage.

Comprehensive insurance is not a legal requirement in Texas, and many drivers carry only the legally mandated liability coverage, which does not include protection against flood damage. This means that many Texans with flooded vehicles will not be able to make valid insurance claims.

The Texas Department of Insurance (TDI) advises those with comprehensive insurance to document the damage and file a claim as soon as possible. Taking photos or videos of the affected vehicle is recommended, and it is important to contact a mechanic before attempting to dry out or start a flooded car, as there may be hidden issues.

For those without comprehensive insurance, there may still be options for assistance. Disaster zones declared by the government may qualify for aid from the Federal Emergency Management Agency (FEMA), and the U.S. Small Business Administration (SBA) offers low-interest loans for homeowners and renters with property damage from natural disasters. Additionally, selling a flooded vehicle to a salvage yard can provide some funds to put towards a replacement.

While comprehensive insurance covers flood damage, it is important for Texans to be aware that this type of coverage is not mandatory and that alternative options for support are available if their vehicles are affected by flooding.

Steps to take to get your auto insurance to cover flood damage

Hurricane Harvey caused severe damage to vehicles, with an estimated 300,000 to 500,000 cars in Houston alone being considered a total loss. If your car was damaged by flooding during Hurricane Harvey, here are the steps you can take to get your auto insurance to cover the damage:

Step 1: Check Your Insurance Policy

Before filing a claim, review your insurance policy to confirm whether you have comprehensive coverage. Comprehensive auto coverage includes flood damage, and you can usually find this information on the declaration page of your policy. If you don't have the policy document, contact your insurance agent or company to confirm your coverage.

Step 2: Document the Damage

Once it is safe to access your vehicle, start drying it out and assessing the damage. If your car was submerged, do not attempt to start the engine, as this could cause further damage. Instead, have it towed to a reputable mechanic who can assess the engine, transmission fluids, and electrical system for any water damage. Take detailed pictures of the car's interior, exterior, and engine compartment, including any visible water damage or floodwater levels. These photos will be crucial when filing your claim.

Step 3: File a Claim

Contact your auto insurance company as soon as possible to initiate the claims process. Provide them with your policy number and give them an overview of the damage, including any repairs or replacements that may be needed. Be prepared for potential delays, as insurance companies are likely to be dealing with a high volume of claims following a major storm or flood.

Step 4: Request a Rental Car

If your comprehensive policy includes rental car coverage, ask about arranging a rental car while your vehicle is being repaired or replaced. This can be extremely helpful, as rental cars may be in high demand and short supply following a natural disaster.

Step 5: Explore Additional Options

If you do not have comprehensive coverage or adequate auto insurance to cover the flood damage, there are still some options for assistance:

• Contact the Federal Emergency Management Agency (FEMA) or visit DisasterAssistance.gov, as President Trump declared many of the affected areas as disaster zones, which may provide some relief for property losses not covered by insurance.
• Check with your home insurance provider, as some home insurance policies may cover damage to vehicles parked at the insured residence during a covered peril.
• Explore low-interest loans from the U.S. Small Business Administration (SBA) for homeowners and renters facing property damage due to natural disasters.
• If you have no insurance coverage, consider selling your flood-damaged vehicle to a salvage yard to help fund the purchase of a replacement car.

The impact of Hurricane Harvey on auto sales in the region

Hurricane Harvey wreaked havoc on the auto industry, with hundreds of dealerships and vehicle production centres forced to shut down due to unprecedented flooding. The impact of the storm was felt across the industry, from dealers to manufacturers, and it caused a significant disruption in sales and production.

The Houston area, a major hub for the auto industry in Texas and the Gulf Coast, was particularly hard hit. AutoNation, the largest dealership network in the US, had to close 17 of its stores in the region, along with an auction centre and a collision centre. Other dealerships also suffered extensive damage, with flooded buildings and vehicles. According to Bill Wolters, president of the Texas Automobile Dealers Association, about 25% of dealerships in Houston sustained flood damage.

The immediate consequence of these closures was a disruption in sales. As many as 20,000 to 40,000 new-vehicle sales could have been delayed due to the storm, according to Cox Automotive. The Houston region accounts for about 30% to 40% of Texas sales, which in turn make up to 9% of US sales. This led to a predicted drop in nationwide sales for August 2017, with Citi analyst Itay Michaeli revising his estimate for the rate of monthly auto sales downwards due to the impact of the hurricane.

However, despite the short-term disruption, a rebound in sales was expected in the following months as motorists replaced their damaged or totalled cars and trucks. This phenomenon was dubbed the "Harvey Effect", with a surge in new-car sales predicted for the end of 2017. Analysts predicted that the replacement of vehicles would boost sales, particularly for pickup trucks and SUVs, as Houston is one of the nation's biggest buyers of large vehicles.

How to fight back if your insurance claim is delayed or denied

Hurricane Harvey caused an estimated 300,000 to 500,000 vehicles in the Houston area to be written off due to damage. For those with comprehensive auto insurance, the next steps were to document the damage, contact their insurance company, and be patient as insurers dealt with the influx of claims. However, if an insurance claim is delayed or denied, there are several ways to fight back.

First, it is important to understand the reasons behind a delayed or denied claim. Common causes include erroneous or incomplete information, missing supporting documentation, investigations into suspected fraud or large claims, high claim volume, underwriting review, and administrative problems. Knowing the reason for the delay or denial will help you address the issue more effectively.

If your claim has been delayed, you can take several steps to expedite the process:

• Consult your agent to determine the precise point at which your claim is blocked.
• Log in to the insurance company's portal to check the status of your claim, identify any delays, and find a resolution.
• Maintain continuous communication with the claims team, surveyor, TPA, company, and investigator.
• Raise a complaint on the Grievance Redressal Mechanism, such as Bima Bharosa in India, or contact the Insurance Ombudsman if you do not receive a response.

If your claim has been denied, you have the right to appeal the decision and request a review by a third party. Here are some steps you can take:

• Contact your insurance company and ask them to reconsider their decision. They are required to inform you of the reason for denying your claim and the process for disputing it.
• Gather and submit any missing or corrected information as per the insurance company's instructions.
• Be persistent and don't give up. Familiarize yourself with the appeals process and submit your appeal within the specified timeframe, providing all the necessary supporting documentation.
• Seek legal counsel if you believe the insurance company is acting in bad faith or failing to honor their contractual obligations.

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