Families that evacuate when a hurricane is on the way often have to leave most of their belongings behind, including a family vehicle. Flood damage can total a vehicle, leaving owners with limited or no transportation and insurers with a hefty claim to pay out.
But vehicle fintech Way.com has begun offering a service, in collaboration with insurers, to move vehicles out of the way when storms approach.
Drivers who use Way’s Catastrophe Loss Mitigation program will receive a phone alert when a storm is approaching, a prepaid reservation at a secure local parking garage, and Uber credits for dropping off and later retrieving their vehicles.
Program availability
CURE Auto Insurance is the first insurance company to partner with Way to offer the program. The insurer sells auto coverage in New Jersey, Pennsylvania, and Michigan.
Way doesn’t market the program directly to consumers. Instead, it partners with insurers to offer the service as part of the coverage insurance companies offer. The fintech is currently working to launch the Catastrophe Loss Mitigation program with several other major carriers, Jeannie Assimos, a spokesperson for Way, told Insurify.
Flood impact on vehicle insurers and owners
“In the last five years, 1.6 million cars have been lost due to flooding,” said JR Anciano, Way’s vice president of strategic partnerships, in a press release announcing the program. “When families evacuate, they typically leave together, and often must leave a car behind. Now, their vehicle can be taken to a safe, protected space.”
“We are in the business of risk management, and every day, you’d take a loss avoided over a loss incurred,” said Sean Albert, chief operating officer of CURE Auto Insurance. “Unlike the homeowner’s insurance market, as an auto insurer, the property we insure can be moved out of harm’s way.”
A totaled vehicle not only costs insurers, but it also often creates financial headaches for policyholders.
Full-coverage car insurance typically covers flood damage, but only up to a vehicle’s actual cash value, which takes depreciation into account. This means it’s common for a driver to owe more on a vehicle lease or loan than the total loss claim’s payout, because cars depreciate so quickly. This leaves the vehicle owner responsible for paying off the remaining balance, unless they also have gap insurance.
Problematic resales of flood-damaged vehicles
It’s not always easy to tell if a vehicle has been submerged in flood waters, according to the National Association of Insurance Commissioners. Flooded vehicles may look fine, but they can hide serious damage.
While most states require previously flooded vehicles to carry salvage titles, some states allow their resale if the title discloses the damage.
Floodwaters can cause catastrophic damage to vehicles, including metal corrosion, exhaust system failure, computer malfunctions, electric system short circuits, airbag failure, and more, according to CARFAX. In 2023, approximately 452,000 flooded vehicles found their way back into use, CARFAX reports — a 13% increase over the number of flooded vehicles in use in 2022.
“Many insurers won’t cover a vehicle that’s previously been totaled, including if it was totaled in a flood,” says Buddy Parkhurst, a licensed insurance agent with Insurify. “And even if you can buy coverage for a flood-damaged vehicle, it’s likely to be more expensive than coverage for a comparable vehicle that’s never been in a flood.”
What’s next? Expanding protection to more vehicles
“We want to add as many insurance carriers as possible to save more cars,” Assimos said. “This will help people save one of their cars and evacuate as a family in their other car. It will also help reduce the number of flooded vehicles sold on the market.”
Way’s services include the ability to book parking in locations throughout the country. “We’re fortunate enough to work with many different parking garage partners nationwide,” she said. “We’ve hand-chosen secure, covered, elevated lots that will keep cars protected during major weather events.”
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