Hurricane Irma devastated the island of St. Martin. Photograph credit score: Reuters
Insurers together with Progressive Corp. and Allstate Corp. have stopped issuing insurance policies on new vehicles in sure Florida counties, hindering automobile gross sales days earlier than Hurricane Irma is forecast to hit the state.
The businesses could also be overreacting to losses incurred final month associated to Hurricane Harvey and refusing to challenge protection, Ted Smith, the president of the Florida Car Sellers Affiliation, mentioned by cellphone. State Farm Mutual Car Insurance coverage Co. continues to be issuing protection and ready till a nationwide hurricane advisory earlier than halting new insurance policies, he mentioned.
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“When you take us out of enterprise for every week earlier than a storm even hits and possibly every week after, you possibly can think about the impression, not simply on shoppers who’re inconvenienced however the state’s financial assets,” Smith mentioned. “I’m urging via our public officers that they discuss to those insurance coverage corporations and ensure they comply with the coverage of State Farm — wait till there’s imminent hazard earlier than you cease writing vehicles.”
Hurricane Irma, which Barclays Plc estimates might trigger as a lot as $130 billion in injury, was headed to Puerto Rico Thursday afternoon and will attain Florida this weekend, the Nationwide Hurricane Middle mentioned. The insurance coverage trade has already taken successful from Hurricane Harvey, which inundated the Texas shoreline and left elements of Houston, the fourth-largest U.S. metropolis, below toes of water.
Progressive has put binding restrictions on new prospects in some Florida counties, mentioned Jeff Sibel, an organization spokesman, including that insurers usually achieve this forward of storms. Allstate has a property and auto moratorium in place in 23 counties, in keeping with April Eaton, a spokeswoman. The businesses are the third- and fourth-largest auto insurers within the state, in keeping with in keeping with information compiled by A.M. Finest Co.
Insurers might face greater than $10 billion in claims from Harvey, in keeping with FBR & Co. A strike from Irma might be the primary time since 1964 that the U.S. was hit by back-to-back storms of Class three or extra.
Analysts at JPMorgan Chase & Co. and Shopper Edge Analysis LLC estimated Harvey lowered the seasonally adjusted annualized fee of U.S. auto gross sales in August by as a lot as 400,000 automobiles.
The tempo of auto deliveries slowed to 16.1 million, in keeping with researcher Autodata Corp., lacking analysts’ common estimate of 16.four million. Some projected earlier than the storm made landfall that the trade would have its first month-to-month gross sales acquire this 12 months.
Barry Frieder, the president of Potamkin Automotive, which owns three dealerships in Miami, mentioned that insurers stopped writing insurance policies starting Tuesday.
“We’ve type of been out of enterprise since yesterday,” he mentioned.
Florida dealerships generated $70 billion in automotive retail gross sales final 12 months and about $four.2 billion in retail gross sales tax income, in keeping with Smith.