Source: Insurance Business Magazine - See Editors Note following
A famous photo on Twitter of a silver Ferrari California abandoned under a bridge on a Toronto highway, covered in flood water over its license plate, raises a question in insurance circles about whether drivers who submerge their vehicles in floodwaters should be covered for the loss.
A Toronto lawyer owned up in the media to abandoning his $200,000 vehicle in floodwaters while police cordoned off the area. He said he made his way to the airport during Toronto's worst rain storm since 1954 to argue a motion in an Ottawa court for a client.
"I guess that's what insurance companies are for," Howard Levitt told the Toronto Star. "But the bottom line was, I had a case to get to. You can't let the client down, no matter what personal exigencies you might have."
What if other drivers attempted the same thing with their expensive cars? Would they be covered by insurance if they submerge their cars in rising floodwaters?
"Yeah, you are," said one broker in Toronto. "Stupidity is covered. The auto policy covers flood damage and damage caused by rising water. You could just argue that you were trying to get home."
One source in the adjusting industry said he did not see how an insurance company could deny coverage.
The insurer would have to prove that the driver deliberately intended to damage the vehicle by driving it into the water, he said. But most drivers don't actually think they will damage their vehicles when they drive them into deep floodwaters, he said. "They think they will make it through to the other side."
Another broker said details are important. For example, if the roadway is not blocked, a driver wouldn't have any reason to turn away from the waters. In a flash flood at night, it might be difficult to determine the depth of the water, he added. Also, many drivers are not aware that immersing a car's tailpipe in water will stop the car's progress.
"I don't know (about coverage)," he concluded. "If he was a client, would we argue for him? Absolutely."
But at least one insurance broker in Toronto said she didn't see how someone could drive a car into a deep pool of floodwater, stall the car, and later abandon the car to its fate, all the while expecting to receive an insurance cheque for the damage.
She pointed out that insurance policies require a driver to mitigate the loss. Deliberately driving through deep floodwaters would not be an example of trying to prevent damage to the car.
Also, policies require that the driver not abandon the vehicle. These two factors themselves could potentially limit the coverage available under the policy, she said.
Editors note: Insurance, like life in general, is not always black or white...covered or not-covered, "stupid" or just ignorance. When there is doubt it might rely on the relationship developed by the client, broker and insurance company often over many years. R.Guthrie.