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Fisker sues XL Insurance over 338 Karmas lost to Sandy

Discussion in 'Electric Vehicles' started by doug, Dec 29, 2012.

  1. doug

    doug Administrator / Head Moderator

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    #1 doug, Dec 29, 2012
    Last edited: Jan 2, 2013
  2. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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  3. doug

    doug Administrator / Head Moderator

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    The point of interest in the Reuters article was this:
    I make the opposite interpretation as Jay Cole at Inside EVs:Insurance Company: About Those 338 Drowned Karmas, We Are Not Paying. Fisker: Well Sue
    Would like to see the details, but I think it's possible that the cars were covered if they were "in transit" and possibly not if they were being stored for could have been many months.
     
  4. rolosrevenge

    rolosrevenge Dr. EVS

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    If the insurance company's lawyers can stall for about a year, they may just escape by having Fisker go bankrupt first...
     
  5. Raffy.Roma

    Raffy.Roma Active Member

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    I wouldn't like Fisker go bankrupt. I think Fisker has good ideas that just need to be improved.
     
  6. doug

    doug Administrator / Head Moderator

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    If that were to happen, couldn't Fisker's creditors still pursue it?
     
  7. rolosrevenge

    rolosrevenge Dr. EVS

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    Probably. Interestingly, at 33 million, if the insurance does stall as much as they can, could end up being the final nail to bankrupt them.
     
  8. doug

    doug Administrator / Head Moderator

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  9. doug

    doug Administrator / Head Moderator

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  10. Raffy.Roma

    Raffy.Roma Active Member

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    I think that the stream of misfortunes occured to Fisker are not due to a bad "Karma" but to the fact that Fisker Karma is a new kind of car with revolutionary contents that, because of this feature, are very much at the border of the existing technologies. That's the source of all the problems occurred to Fisker Karma.
    But I think that with further research and development Fisker will work out all the problems and will find the reliability that now is missing to the Karma.
     
  11. rolosrevenge

    rolosrevenge Dr. EVS

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    My question about this insurance deal is: If the Karma's were in transit they are covered or is it if they were being stored they are covered? Then it comes back to just how well they are selling.
     
  12. Raffy.Roma

    Raffy.Roma Active Member

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    I think that this is a subtle legal matter and for this reason it is better if lawyers deal with it. From my point of view, not being a lawyer, Fisker had the insurance and he should be refunded.
    I also think that the Karma is good independently from the sale volume. In my opinion for such a new car anything can be inferred from the sale volume. Time and development is needed to judge it.
     
  13. doug

    doug Administrator / Head Moderator

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    Annoying that none of the blogs bothered to make that clarification and just quoted Reuters to say that if had something to do with whether or not the cars were "in transit".

    As I posted above, the cars were supposedly covered by insurance if they were "in transit." Fisker is arguing that waiting for service for the cooling fan recall is considered "in transit" by the insurance policy.
     
  14. stevezzzz

    stevezzzz R;SigS;P85D;SigX

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    There's an old saying to the effect that, while you might naively imagine your insurance premiums go into a fund to pay future claims, they're actually used to pay the insurance company's lawyers to fight those claims.

    There are plenty of horror stories to support that cynical view, which is why it's worthwhile to place your business with an insurance company that has a good track record of customer service and fair claims processing.
     
  15. bonnie

    bonnie Oil is for sissies.

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    If the policy says it covers cars 'in transit', then it would be safe to assume the cars were traveling from one location to another. Fisker might lose this one if the insurance company can show the cars were being temporarily stored.

    Screen Shot 2013-01-02 at 1.37.19 PM.png
     
  16. Zythryn

    Zythryn MS 70D, MX 90D

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    It is difficult to say without more information.
    If the coverage explicitly stated the cars are covered while in transit, I am sure it also listed the origin and destination.
    I would be willing to bet it is at least a 40 page document and will require a lot of lawyers on both sides to parse out what it really says.
     
  17. ipdamages

    ipdamages Roadster Sports 835 & 972

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    #17 ipdamages, Jan 2, 2013
    Last edited by a moderator: Jan 2, 2013
    Fisker sues insurance company over 338 cars, $33M, lost in Sandy Cleantech News and Analysis

    The policy reads as follows:

    Damage to personal property included within Insured Property, while in
    transit within the Territory [including the United States] …from the time
    the property is moved for the purpose of loading and continuously
    thereafter while awaiting and during loading and unloading and in
    temporary storage … including during deviation and delay, until safely
    delivered and accepted at place of final destination.


    It seems clear that the cars had not yet reached their final destination (the dealers) as they were awaiting the fan recall service, as well as battery and software updates.

    They also did not start being covered until they were on US soil, per the policy's paragraph II.T, which excludes an import shipment from coverage until the later of two events occurs:

    (a) The shipment is unloaded from the importing vessel or conveyance;
    or
    (b) Coverage under an ocean marine or other insurance policy covering
    the shipment ends.


    Both of those conditions seem to have occurred.

    That said, while the policy has a total limit per occurrence of $100,000,000, there is an "in transit" sublimit of $5,000,000, per paragraph G, section (c) of the Declarations:

    "'Transit' is subject to a distinct sublimit of $5,000,000."

    But Fisker has arguments about why that sublimit may not apply. See Complaint, p. 8.

    as has been discussed, the tough challenge Fisker faces is the fact that they were at least somewhat in control of the cars at the FAPS facility. Fisker tries to characterize this as being "movement for the purpose of loading" at FAPS, but the recall service and updates on software and battery are hard to argue in that way.

    FAPS is a transshipment facility, and delivery of the vehicles into the FAPS
    facility constituted “movement for the purpose of loading” onto conveyances for further
    transport to final dealer destinations in the United States, within the meaning of the Policy.
    Accordingly, the Transit coverage of the Policy extended to the vehicles at the time of the loss.
    See Ex. A at 11 of 50.


    Fisker's argument is:

    Because of the recall which required replacement of cooling fans before the
    vehicles could legally be delivered to dealers, as well as other service requirements, the vehicles
    were subject to “deviation and delay” within the meaning of the Policy before final shipment
    from the transshipment facility to the dealerships could be effected.


    All that said, I believe this will all turn on the interpretation of the contract language and these issues by the court and the jury, if they get that far. I strongly suspect that after summary judgment it will settle, assuming that Fisker makes it through summary judgment. The carrier (XL America) will not want to be seen by Fisker and the whole industry as being unwilling to pay on claims. It has too much negative baggage for their future business.

    My $0.02 (as someone who calculates damages in litigation and testifies to such, including in insurance disputes)...
     
  18. doug

    doug Administrator / Head Moderator

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    Really appreciate your educated insight, ipdamages.
    Seems to me another issue is how long is a reasonable delay. Given the production timeline, the majority of those cars could have been waiting on the lot since July or earlier. The fan recall was issued in August, two months before Sandy. So how long is a reasonable time to perform that service and still be covered, if at all.
     
  19. ipdamages

    ipdamages Roadster Sports 835 & 972

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    Thanks for cleaning up my post with the italics, Doug, and for the thread breakout. Fine administration in action!

    And I agree that having cars sit there for months is a highly relevant point. Not a good fact for Fisker. I think the complaint said those cars came in on more than 20 different shipments. It is probably going to be hard to argue that the in transit section of the policy is intended to cover months of having the cars sit in NJ before moving them.

    - Chris
     
  20. Doug_G

    Doug_G Lead Moderator

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    Sounds like Fisker didn't do their due diligence in ensuring these vehicles were clearly insured...
     

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