While the nation currently ponders its collective safety on the roads as the furor regarding the massive Toyota recall continues to build—and now add to that reports of Honda voluntarily adding 437,763 vehicles to the list for faulty airbags—additional questions remain for both consumers and insurers regarding claims responsibility.

Personal and commercial lines auto insurers that cover Toyota vehicles, such as Allstate and State Farm, are now reviewing accident claims that were otherwise considered closed to determine driver vs. mechanical problems such as the now-known vehicle’s acceleration.

State Farm, which went public this week with the announcement that it blew the whistle on Toyota in 2007 by warning the National Highway Traffic Safety Administration about the manufacturer’s trend of vehicle-caused accidents, told Insurance Networking News that it is considering subrogation action against the auto manufacturer.

State Farm spokesman Kip Diggs says that State Farm treats each claim according to the unique circumstances relating to that claim and, as a result, this “could result in us subrogating against the vehicle manufacturer.”

Meanwhile, responding to consumers concerns, yesterday, the Property Casualty Insurers Association of America (PCI) urged Toyota owners to put safety first and follow the car manufacturers’ instructions regarding the recalled vehicles.

“Consumer safety is a top concern for the insurance industry, and we are encouraged that Toyota dealers nationwide are beginning to make repairs on the vehicles involved in the recall,” said Robert Passmore, senior director of claims for PCI, in a statement. “However, if in the rare occurrence where the recalled part causes an accident, the driver’s automobile liability or physical damage insurance will provide coverage. This type of unforeseen event is what insurance is for. If the pedal is a factor, the insurer will pay the claim for the driver and then likely seek to be reimbursed by Toyota. This is one less thing for the consumer to worry about.”

Passmore went on to assuage drivers concerns by reassuring drivers that a vehicle recall by itself generally does not cause premium rates to rise.  “Looking forward, it is unlikely that rates would be affected by the recall,” Passmore added. “Over the years, Toyotas have developed a good safety record as evidenced by the popularity of their vehicles, so it is unlikely that there will be enough accidents caused by the faulty pedals that rates will increase. Insurers look at the cost of claims over a period of time for vehicle. They are interested in how much it costs to repair a vehicle and how often the vehicle is involved in an accident. The insurance industry is committed to standing by our customers and fulfilling our promises when we are most needed.” 

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access