Hurricane Harvey has destroyed up to 1 million cars and trucks along the Texas Gulf Coast, and the auto insurance market is bracing for the impact. Early estimates suggest this is the most number of vehicles destroyed by a natural disaster in U.S. history.
As of Thursday, about 100,000 claims have already come in, and the numbers are expected to reach half a million, according to Matt Stillwell of the Insurance Council of Texas, per The New York Times. This would be a huge impact on the auto insurance market as insurers are expected to cover a big part of the losses.
Insurance rates in the state could expect an increase as insurers would try to offset the underwriting losses in claims related to Harvey. Big insurance companies that offer auto insurance in Texas include State Farm Mutual Automobile Insurance, Allstate Insurance, Farmers Insurance Exchange, National Indemnity Company, the Progressive Group, and Metropolitan Property and Casualty Insurance.
In Houston, each household has about two vehicles, and analysts from Evercore ISI said one in seven cars might have been destroyed by Hurricane Harvey, as reported by USA Today. The storm might have also affected over 350,000 new cars in dealership lots, of which up to 200,000 are in the hardest-hit areas. Around 300,000 to 500,000 vehicles owned by individuals are estimated to be damaged by the hurricane.
Harvey may have wrecked up to 1M cars and trucks https://t.co/Wggp7yxrbp
— USA TODAY Money (@USATODAYmoney) September 1, 2017
CBS News shared some safety reminders to do when it is already safe to return to your vehicle to assess the damage following Hurricane Harvey. First is to dry out your car, and if it was submerged up to the engine, do not start it as there could be water in the engine cylinders that could cause severe damage. Have your car towed to the mechanic to assess the engine oil and transmission fluids.
Comprehensive auto policies cover flooding, and if you have one, you can receive a payment based on replacement value less depreciation if the vehicle is a total loss. To begin processing your auto insurance claims, take a lot of pictures of your car including the odometer, the interior and the trunk’s inside. Ask the mechanic to include observations in his inspection report.
Have your policy number ready, as well as the details of the damage, and other information you need before contacting your insurance company. Be patient as well as the company is expected to be attending to a lot of calls from people in the same situation as you. Lastly, your policy might include short-term rental benefits, which you can take advantage of while waiting for repairs or replacement of your car.
Harvey to impact car sales, prices after flooding thousands of vehicles https://t.co/5JwM1TSlZa
— FOX Business (@FoxBusiness) September 1, 2017
[Featured Image by Scott Olson/Getty Images]