When Hurricane Sandy devastated the New York metro area last October, some 338 Fisker Karma
sedans parked at Port Newark, New Jersey were destroyed by flooding or fire
Fisker believed the vehicles were covered by insurance, issued through XL Group Plc., so it submitted a claim as quickly as it could in Sandy’s aftermath. As Green Car Reports
explains, that claim was denied by XL Group on December 20, forcing Fisker to pursue litigation against its insurance carrier.
While Fisker’s policy covers up to $100 million in damages from named storms, its $33 million claim was denied over semantics. At issue is whether or not the cars were “in transit” at the time the damage was incurred, which would absolve XL Group from paying the claim in its entirety.
The denial forces Fisker to pursue a resolution via the courts, a protracted and potentially costly obstacle for the struggling automaker. Fisker is seeking a court order that would require XL Group to pay the claim, in addition to unspecified damages for breach of contract.
Given Fisker’s already-staggering run of bad luck surrounding the Karma (which has seen recalls
, vehicle fires
and damning reviews from the likes of Consumer Reports), a potentially lengthy legal battle to recover the cost of destroyed inventory is the last thing it needs at the moment.