Car Dealers Claim Insurers Are Halting Policies Ahead of Hurricane Irma

Matt Posky
by Matt Posky

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.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • 28-Cars-Later 28-Cars-Later on Sep 08, 2017

    I'd just like to wish good luck and Godspeed to Flybrian and the other TTAC'ers in Florida who I assume are trying to evacuate.

    • See 3 previous
    • 28-Cars-Later 28-Cars-Later on Sep 08, 2017

      @PrincipalDan Evacuate in style.

  • E30gator E30gator on Sep 08, 2017

    Thank you for saying that. Right now there's no gas anywhere to be found in Fla, and my brother in Charlotte,NC said it's almost as bad up there with all the evacuees headed in. The roads are at a near stand still too. Evacuation might've been an option a few days ago (when Irma still looked like it would ride up the Atlantic, but getting stuck somewhere w/o gas is just too scary a prospect at this point. Looks like it's going to be a hurricane party weekend!

  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
  • ToolGuy Ford is good at drifting all right... 😉
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