After Sandy, Claims, Aid Efforts for Insurers Continue

Initial reports from various insurance companies are trickling in about what are sure to be long-term efforts to rehabilitate areas heavily damaged by Superstorm Sandy, which socked the Northeastern U.S. with destructive rain and wind that wrought millions of dollars in property damage.

The disaster began in the Carribbean in late October and struck heavily populated areas in New York and New Jersey before dissipating last week.

Insurers Report Claims Numbers

State Farm reported that it had received 14,961 total auto claims as of noon on Thursday, with New York, New Jersey and Pennsylvania accounting for the largest shares.

The following are some of the state-by-state auto-claims breakdowns from the insurer:

–New York: 8,337
–New Jersey: 3,631
–Pennsylvania: 1,515
–Maryland: 740
–Virginia: 420
–Delaware: 149

Car insurer Progressive reported on Friday that it had received about 6,000 claims from Superstorm Sandy. Of those claims, CFO Brian Domeck said, about two-thirds were related to flood damage with the rest related to wind damage.

Claims from New York and New Jersey made up about 80 percent of claims filed with Progressive, while 10 percent were from Pennsylvania and Connecticut. Another 10 percent of claims were spread across other affected states, according to Domeck, who added during a conference call last week with investors that they could expect the first damage figures from the catastrophe to be reported in the insurer’s October financial report to be released next Wednesday.

Liberty Mutual spokesman Glenn Greenberg said that the insurer is “not yet publicly reporting claims volume.”

Nationwide reported that it had received 21,000 claims by Friday, though a breakdown of auto-related claims was unavailable.

Insurance Companies Pitch in Aid for Victims of Costly Disaster

The Insurance Information Institute (III) has not compiled auto-related damage figures incurred by the industry yet, but total insured losses are estimated to be between $10 billion and $20 billion. The latest estimate would peg Superstorm Sandy as one of the costlier hurricanes in recent history; last year’s Hurricane Irene caused more than $4 billion in insured losses.

On the ground, many of the best auto insurance companies are doing their part to pitch in to aid victims, whether it’s with monetary relief or claims work.

III spokeswoman Loretta Worters said that insurance companies typically mobilize claims centers that are “basically like fully functional satellite offices,” along with teams of agents that enter disaster areas to spearhead claims support there.

Allstate’s mobile claims centers have been set up in several states following Superstorm Sandy, according to the insurer, which equips those centers with their own generators and even high-speed Internet access.

The insurer also announced on Tuesday that The Allstate Foundation is pledging up to $1.2 million in relief funds to various nonprofits, including the American Red Cross Disaster Relief Fund.

The Red Cross Disaster Relief Fund will also receive a $300,000 donation from the Nationwide Insurance Foundation “to aid the growing number of famiiles in need,” according to the insurer.

Following a relatively mild first half of the year, the industry itself should be able to handle the financial damage caused by the disaster.

Several insurance carriers, including Liberty Mutual and Allstate, reported healthy quarterly finances that were strengthened by lower catastrophe losses.

In early October, the Property Casualty Insurers Association of America (PCI) reported a huge drop in net losses from catastrophes in the first half of 2012 ($12.6 billion) compared with the same period last year ($25.7 billion). Unburdened with heavy catastrophe losses, insurance providers saw an improvement in underwriting results that ultimately increased profitability, according to PCI.

Trade, Consumer Groups Issue Warnings During Cleanup

PCI was one of several trade groups warning consumers about dangers that victims can encounter during cleanup efforts.

As it comes to vehicles, flood damage can lead to physically dangerous situations, according to PCI, which issued the following tips for owners of flooded vehicles:

–If the water got above the floorboards, or the seats are wet, don’t try to start the car. The electrical system is the most sensitive to water damage, and trying the start the car could cause more damage.
–Open the hood and check the air filter, which is easy to find under the hood. If it’s wet, do not try to start the car.
–Report the loss to your insurer, and protect the car from further damage by covering any broken windows, etc.

Flood damage can be just a dangerous financially, and trade groups are warning consumers of unscrupulous activities that can follow disasters. The National Insurance Crime Bureau (NICB) said that it would be in disaster areas to help authorities catalog vehicle damage “with the goal of preventing damaged vehicles from being resold to unsuspecting consumers in the future.”

Consumers looking to buy a car are encouraged to use any one of the many vehicle history databases to see if the car they are interested in was salvaged, flooded and/or declared a total loss.

The NICB has its own free database called VINCheck. Others include Carfax and the National Motor Vehicle Title Information System.

Comprehensive Coverage Vital as Harsh Weather Continues

Weather damage to vehicles is typically addressed by the comprehensive portion of an auto policy, covering incidents including flooding.

“Flood claims for us are probably going to be, more often than not, total losses,” Progressive’s Domeck said during the conference call. “Saltwater is not good for cars.”

Insurance companies that are already in the northeastern U.S. are now hunkering down for a nor’easter that can carry “strong winds, heavy rain, coastal flooding and snow,” according to PCI. The storm hit New York and New Jersey with snow today, according to various media reports.

Comprehensive coverage also comes into play with snow-driven weather, covering damage in situations where snowfall weighs down trees that can collapse onto vehicles.

Allstate, already in the area with mobile claims centers, said that it could “adjust the deployment” of those centers and other personnel as the new weather conditions require.

The III and PICAA have posted telephone directories for consumers to reference if they need help filing claims.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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