BY KATHY GIBBONS
TRAVERSE CITY —
Superstorm Sandy struck hundreds of miles away, a thunderous blow to the East Coast of the U.S., but its effects rippled all the way back here.
Sandy represents the single-largest catastrophic event for Traverse City-based Hagerty Insurance — and for the classic car industry — in the company's 28-year history. Hagerty is the largest insurer of classic cars worldwide.
Hurricane Sandy slammed into the U.S. on Oct. 29, killed at least 100 people and caused billions of dollars in damage in New Jersey, New York and Connecticut coastal areas. Hagerty insures 10,000 classic cars on Long Island, N.Y., alone, and the company already has received 1,100 Sandy-related car claims, as well as claims for 50 or so boats.
Storm claims already are valued at $10 millin and counting, said company President and CEO McKeel Hagerty.
"There are no million dollar cars," he said. "The average cost is under $50,000."
Hagerty Claims Assistant Manager Michelle Ayers said calls from customers began Oct. 29 and continued steadily through the next two weeks as evacuees returned to their neighborhoods.
"It was everything from 'I just lost everything I've worked hard for my entire life — it's all gone' to 'What do I do from here, where do I go from here?' Ayers said. "We talked a lot about, obviously, their cars, because it's like a family member to them. A lot of the people I talked to, anyway, (cars) had been passed down from generation to generation."
Ayers recalled one customer who spoke of his destroyed 1980s Corvette.
"He said, 'My car is not fantastic to anybody, but I always wanted it and I finally got it, and now it's gone," she said.
Another customer talked about trying to escape the flooding in the pickup he normally drove every day.
"He said the water got so high that it made the truck stop, and he had to make a decision to get out of the truck and swim up the street with his dog and try to get to safety," Ayers said. "Luckily, none of the people I talked to lost family members."
Ayers said she and other Hagerty claims personnel also frequently heard that customers were grateful to reach a human being when they called.
"People would call four and five times because they said they could get through and talk to a live person," she said. "I think they just wanted to know someone was there."
Hagerty said the company immediately responded by working with salvage companies and adjusters in an effort to flush out car engines that had been immersed in water. Hagerty received three times as many claims from Sandy as it did from Hurricane Katrina, but damage characteristics are similar.
"The thing they have in common is they are really flood more than wind damage," Hagerty said. "The real devastation came from water, and cars and saltwater don't mix terribly well.
"What's totaling these cars, if a car is flooded up to the windshield, anything in the engine compartment, anything mechanical, the interior is pretty much destroyed."
A car under $25,000 that spent even an hour in saltwater probably was doomed.
"But if it's a $50,000 or $100,000 car, we're going to look at it because it may not have to be "¦ because all we have to do is clean it up and put it back together," he said.
About 70 percent of the claims represent total losses, but 50 to 70 percent of those owners want to keep their cars after the insurance payout, Hagerty said.
"They keep the salvage and they're going to re-restore the cars," he said. "To me, that's a little light at the end of the tunnel.
"It proves to quite a degree that the sentimental value of the things we insure is almost worth more than the financial values."
Hagerty itself is insured against catastrophic events like Hurricane Sandy.
"Katrina taught us a lot about that," he said. "That one really caught us by surprise.
"We were not prepared for so many vehicles to be destroyed (at once). We were always prepared for what was perhaps a very valuable collection to be destroyed, but never hundreds and hundreds of cars. So because of that, we were very prepared for something like this."
Hagerty produced a video that include interviews with car owners and scenes of some of the devastation. The video garnered more than 32,000 views on YouTube. It can be viewed through the Hagerty website, www.hagerty.com.