On the tail end of a very difficult year for electric car company Fisker, the company reveals that its insurance claim for 338 Karmas, worth $33 million, was denied by the insurance company, and Fisker is now suing XL Insurance America in court.

Ray Lane's Fisker Karma

Electric car startup Fisker Automotive has filed a lawsuit charging insurance company XL Insurance America with breach of contract for denying coverage of its claim after 338 of its Karma cars were destroyed due to flooding in Superstorm Sandy. The cars were valued by Fisker to be worth $33 million, and Reuters first reported the lawsuit (which I’ve embedded below).

The 338 cars were being held at Port Newark in New Jersey, and during the storm, the cars were “submerged in more than five feet of seawater, resulting in their complete destruction,” says Fisker in the suit. XL denied coverage of the claim on Dec. 20, 2012, and Fisker filed the lawsuit on Dec. 28, 2012.

All I can say is yikes, for the company, which has faced innumerable setbacks and is now looking for a well-financed partner to help it develop and manufacture its second Atlantic car. 2012 was truly an ugly year for Fisker — will 2013 turn things around for them?

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  1. There is no claim here. It was an act of god and excluded from insurance coverage. dont waste the courts time with this and move on to production of a great product.

    1. Nonsense. There is no such exclusion in anyolicy sold in the USA.

  2. This is an act of god. No insurance coverage.

    1. If you believe in God, isn’t everything an act of God? Seems like you could never get paid off for anything then!

  3. The issue here is that Fisker is claiming all the cars at the port were waiting for the cooling fan replacement, and thus constituted “temporary storage … including deviation and delay, until safely delivered” that still falls under the Transit Coverage.

    The thing is we now know Karma production stopped last July at the latest, and those cars might have been sitting at that port for months (possibly even before the August cooling fan recall). It’s likely they didn’t have a specific destination and were just waiting due to soft demand. So I don’t see how Fisker can claim what appears to be indefinite storage at the port as “in transit.”

  4. So, Sam, when the wind blows down a huge tree that totals your car, you do not expect to be covered?

  5. Sam has a point, it boils down to a Force majeure clause.

    Force majeure, also known as cas fortuity or casus fortuitus, is a legal term found in insurance contracts that details the insurance policy of the consumer when it comes to extraordinary or natural events such as hurricanes, typhoons, wars, and others. This term often develops into a clause in an insurance contract. This clause details that parties involved in the contract, both consumer and insurance provider, are free from liability in the event of force majeure.

  6. Actually the thing is that it comes under Act of God and one can not claim for the insurance of that things that comes under act of God. Insurance companies do not pay any liability in this case. May be unfair , but law is that way only.

  7. If its an act of god, then fisker should sue the church as they are supposed to be gods representative on earth. The church will then have to try to get the case thrown out of court on the grounds that god does not really exist.. checkmate!

  8. Plagued with financial issues, quality setbacks, political criticism and now wheather related destruction, it just seems that this car company is ‘cursed’ since it’s inception. Next we’ll be hearing aligations about Henrik Fisker selling cocain to keep his 1st quarter margins afloat. Maybe this is an indication that this company needs to be dissolved.

  9. Re acts of God, I am a contractor here in NY and have many residential customers who collected on their homeowners policy after Sandy for all sorts of damages, including tree removal, powerline repairs within the property, roof repairs, even fence repairs, so somebody’s missing something major here in these comments. And how about flood insurance?

  10. My, what a convenient way to sell cars. Park them in front of a hurricane then claim the full ‘value’ on cars that never would have sold! Genius.

    I hope this is their demise.

    BTW – “Acts of God” is still the legal term referring to natural disasters. Some policies cover them and some don’t.

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