Turners expects insurers to write off about 10,000 cars damaged in the Auckland floods in late January and Cyclone Gabrielle.
Chief Executive Greg Hedgepeth said that number is a best estimate but does not include uninsured vehicles.
New Zealand Insurance Council Te Kāhui Inihua o Aotearoa said about 90% of vehicles are insured, but one in ten car insurance policies are only liability, fire and theft policies, which do not cover flood damage.
“The big unknown is the cars that are uninsured,” Hedgepeth said.
CONTINUE READING:
* Post-flood and cyclone insurance claims ‘absolutely unprecedented’
* Insurers State, AMI and NZI have now filed 21,000 claims from January’s floods
* Warning to car buyers to look out for cars damaged by flooding
Turners handled about half of the insurance write-off market under deals with Suncorp (owners of Vero and AA Insurance), Tower and some other smaller insurers, Hedgepeth said.
“We think there will probably be around 5,000 coming our way.”
A high proportion of flood-damaged cars were written off, he said.
IAG’s depreciation will be handled by Turner’s rival Manheim.
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The Reserve Bank predicts prices will continue to rise, but warns against unnecessary cost increases.
On Friday, an IAG spokesman said its insurance brands AMI, State and NZI had so far received 4,903 vehicle claims from the recent floods and Cyclone Gabrielle.
That number included both personal and business vehicles, she said.
“We estimate that 85% of those claims will be a total loss,” she said.
AA Insurance, which is partly owned by IAG competitor Suncorp, had 2450 motor claims as a result of the Auckland floods and Cyclone Gabrielle.
“For the Auckland anniversary floods, around 75% of vehicles were written off, resulting in a payout or offer of a payout being made to the customer,” said an AA Insurance spokeswoman.
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Tower Motor Assessment Manager Richard Housham inspects a vehicle at Tower’s triage and assessment yard operated by Turners in Wiri following the Auckland floods.
“This is due to flood damage, which renders the vehicle unrepairable and unsafe,” she said.
For Zyklon Gabrielle, 45% of the valued cars have been written off so far.
When a car is written off and a claim is paid to a policyholder, the car becomes the property of the insurer. Insurers hire companies like Turners to dispose of the vehicles.
Turners holds online auctions for written-off cars, and buyers include companies who buy them to strip them of parts.
However, Hedgepeth said a large proportion of the cars damaged by flooding would simply be shredded.
Written-off cars are de-registered and entered into New Zealand transport agency Waka Kotahi’s database of damaged vehicles.
A Waka Kotahi Transport Agency spokesman said on Friday that between February 1 and February 24, 567 vehicles damaged by water and fire were added to the damaged vehicle register and another 317 were notified but were waiting to be processed and added to the list to be included.
“We expect this list to grow in the coming weeks as more vehicle owners contact their insurer and insurance adjusters process the growing number of claims coming in,” she said.
Cars that have been written off could be repaired, but Hedgepeth said there was a strict procedure in place to ensure they were safe.
John Cowpland/alphaPIX
Home and business vehicles were damaged in the Auckland floods and Cyclone Gabrielle.
Car dealers are required under the Fair Trading Act to tell potential buyers if a car has ever been written off, and if they don’t they are dragged before the Motor Vehicles Disputes Tribunal.
In December, You-Cars Limited became the latest car dealer to be ordered to take back a car it had sold to Troy Scarlett without disclosing it was a former insurance write-off and pay him $54,284.
The dealer argued he didn’t have to tell buyers that the cars were ex-insurance write-offs unless they asked.
But Wellington Tribunal Judge Jason McHerron said: “You-Cars had a proactive obligation to disclose all material facts relating to the vehicle, including that it had been written off.”
By not telling Scarlett that the car was an ex-insurance write-off, You-Cars was misleading and deceptive, Mc Herron said.
The Insurance Council has warned of the risk of uninsured water damaged cars being put up for sale privately to unsuspecting buyers.
It urged buyers to look for signs of water damage and to check Waka Kotahi’s advertised vehicle registry when purchasing a vehicle.
