XL Group Plc denied insurance coverage related to damages incurred by Fisker Automotive caused by Hurricane Sandy. A total of 338 Karma plug-in hybrid vehicles were damaged as a result of the hurricane. The vehicles were valued at around $33 million. The Fisker Karma vehicles were parked at Port Newark in New Jersey. This shipping facility was destroyed by Hurricane Sandy. Fisker filed a complaint this past Friday in the New York State Supreme Court in Manhattan.
In the complaint, the Fisker Karma vehicles were sitting in over 5 feet of seawater on October 29th while they were waiting to be shipped to dealers across the country. Fisker Automotive asserted that they submitted their claim in a timely manner to XL Insurance America Inc. The policy was supposed to entitle them to a maximum $100 million of coverage for named storms subject to a deductible and other provisions. The claim was denied on December 20th.
David Klein, an Orrick Herrington & Sutcliffe partner, said that the argument was focused on whether the cars were in “transit.” Fisker is asking the court to issue an order that the policy covers the vehicle loss along with damages for breach of contract and other remedies. Dublin, Ireland based insurance company XL Group has not released a statement. At the facility in New Jersey, it is believed that over 10,000 vehicles were estimated to be lost. This includes several thousand Toyota Motor Company vehicles. Fisker Automotive was hit with several quality-control and financial problems this year related to the Karma. Hurricane Sandy is considered the second costliest catastrophe in history (Hurricane Katrina being the highest) with insured loss estimates being as high as $25 billion.