Plug-in hybrid automaker Fisker has sued its insurance company, XL Group PLC, over more than 300 Karama cars that were damaged by Superstorm Sandy. The insurer previously denied Fisker’s claim.
Fisker Kama damage worth $33 million
The complaint, filed December 28, 2012 in the New York State Supreme Court, alleges that 338 Karma plug-in vehicles, destined for dealerships across the nation, were destroyed when they were submerged in five feet of seawater during the epic Superstorm two months earlier. The vehicles together were worth about $33 million.
The complaint from the Anaheim, California-based startup, filed on Dec. 28, went on to say that XL Insurance denied the claim, in spite of Fisker’s $100 million policy that covers against damage from storms that have names, like Sandy.
Cost of loss plus damages
Fisker is asking XL for the cost of the vehicles, as well as punitive damages for allegedly breaking its contract with the automaker.
‘Transit’ status in dispute
The bone of contention, according to David Klein, whose firm Orrick Herrington & Sutcliffe represents Fisker, has to do with whether or not the vehicles were in transit, in which case other sub-limits could apply.
The New Jersey facility that housed the cars lost more than 10,000 vehicles, including several thousand Toyota vehicles, to Superstorm Sandy.
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Second most costly storm
Sandy is shaping up to be the second costliest natural disaster in U.S. history. Some estimate its damage could reach the $25 billion mark or beyond when all is said and done. It is second only to Hurricane Katrina, which struck the Gulf Coast just seven years earlier, adding fuel to supporters of climate change theories.
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Latest setback for Fisker
It is just the latest setback for Fisker, as aggressive young company that has suffered more than its share of growing pains. It missed its originally-announced launch date in 2009, leading to troubles securing much of its loan from the U.S. Department of Energy. The launch was delayed several times. Production of the Karma finally began in July of 2011.
Later, Fisker was plagued with several incidents of vehicle fires that were originally blamed on its A123 battery pack. However, it was determined later that the fires were the result of a defective cooling fan.
More recently, the bankruptcy of battery-maker A123 has led to a delay in delivering Karma plug-ins.
XL Insurance Group, which is headquartered in Dublin, Ireland, had no comment on the on-going matter.