Florida Hurricane Season Demands Smart Auto Insurance

Florida Hurricane Season Demands Smart Auto Insurance Copyright © 2006, Erin Shaughnessy

Does your car insurance policy cover hurricane damage? If you are living in the state of Florida, or another high-risk region, be sure to purchase a comprehensive policy to cover damages in the event of a storm. Automobile damages resulting from Hurricane Wilma have resulted in more Florida insurance claims than either Hurricane Katrina or Hurricane Rita. Vehicle damage can range from scratches and dents to shattered windshields, and sometimes the complete wreckage of an automobile. Windborne debris and fallen trees may be responsible for most storm-related claims. More complicated claims arise when drivers collide at intersections without working traffic signals due to power outages. State Farm and Progressive are the two largest auto insurance providers in the state of Florida. One week after Hurricane Wilma hit Florida, State Farm had received over eighty-seven- thousand claims, almost thirty-five-thousand of which were for automobile damage. Progressive Insurance reported that it received more automobile insurance claims related to Hurricane Wilma than for any other hurricane last year. Not all cars have insurance coverage for hurricane damage. The policy holder has to have purchased the 'comprehensive' policy in order to be insured for damage to their vehicle resulting from a hurricane. While homeowners must purchase a separate policy to cover flood damage, auto insurance includes flooding in the comprehensive policy. One problem for hurricane related automobile damage is the high volume of claims occurring at one time. Body shops can be inundated with damaged vehicles and policy holders may experience a delay in getting their cars repaired and returned. Adjusters typically check on the most severe claims first. Larger auto insurance carriers, such as State Farm, can call on insurance claim adjusters from other states to share the burden of visiting damaged vehicles. Due to general hurricane damage to hard-hit areas, insurance company representatives may have trouble gaining access. Even if access is not a problem, adjusters can still face heavy traffic and long lines at gas stations, just as residents do following a hurricane. It is important for insurance company representatives to survey damaged vehicles quickly, as policy holders are often encouraged to refrain from having their automobiles repaired until the adjuster has visited. Following Hurricane Wilma, about 225,000 automobile claims were filed in the state of Florida. According to the Florida Office of Insurance Regulation, there were approximately 180,000 claims filed by Floridians in 2004 for damage to vehicles resulting from Hurricanes Charley, Frances, Ivan, and Jeanne. According to Insurance Services Office Inc., (ISO), property and casualty insurers would pay approximately $6.1 billion to policy holders in the state of Florida for losses from Hurricane Wilma. The ISO Property Claim Services unit asserted, in a November 28, 2005 press release, that ninety percent of the catastrophe losses from twenty-two events resulted from three hurricanes. The year to date catastrophe losses could be as much as $50.3 billion, according to the ISO Property Claim Services unit. Hurricanes Katrina, Rita, and Wilma were responsible for $45.2 billion of catastrophe losses. ISO Property Claim Services expected to receive approximately 750,000 claims relating to damage of personal and commercial property, automobiles, boats and yachts. In a press release dated January 26, 2006, Insurance Services Office, Inc. revealed that United States property and casualty insurers would pay a record breaking $56.8 billion to homeowners and businesses for property losses in 2005. The actual amount of property damage insurers will pay exceeded the estimated amount by $6.5 billion. This number breaks the previous record, of 2004, when $27.3 billion was paid by insurers for catastrophe claims. Ninety-three percent, or $52.7 billion, of the insured losses for 2005 were accounted for by Hurricanes Katrina, Wilma, Rita, Ophelia, and Dennis. ISO also reported that over eighty percent of these claims came from policy holders in just five states; Louisiana ($27.2 billion), Mississippi ($12.2 billion), Florida ($9.9 billion), Texas ($2.9 billion), and Alabama ($1.5 billion).

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Erin Shaughnessy is a freelance writer of political and
consumer advocacy articles.  She is a contributor to
SmartAutoInsurance.com and has most recently covered 
Florida auto insurance topics related to Hurricane
damage.