Insurance Companies Begin Asking Toyota To Repay THEM For Claims

Armed with reports of accidents for which they've already paid claims, State Farm insurance has asked Toyota to repay them for any crashes related to unintended acceleration by its vehicles.

Other companies are expected to follow and demands for repayment of claims — called "subrogation" in the insurance business — could end up costing Toyota from $20 million to $30 million, says Mark Bunim, an attorney with Closed Case, a mediation firm. Customers could see a bonus from any repayment: Insurance deductibles they paid could be refunded.

"If we didn't incur any risk, we get our part back and you get your part back," says Dick Luedke, a spokesman for State Farm.

Toyota has recalled 7.7 million vehicles in two recalls related to sudden acceleration, one involving floor mats that can jam gas pedals and one involving pedals that stick. The government last week fined Toyota the maximum $16.4 million for violating a five-day deadline in reporting the sticky pedals. Toyota has not decided whether to appeal.

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Agent009 - 4/12/2010 3:21:11 PM

0 Boost

???

veyron1001 - 4/12/2010 3:46:41 PM

+2 Boost

Last time I checked Toyota does warranty claims not insurance payouts.

Agent009 - 4/12/2010 4:46:01 PM

+1 Boost

Last time I checked, Insurance companies don't pay out for other companies defects either.

BondMI6 - 4/12/2010 3:51:53 PM

+1 Boost

Will this Toyota mess never end?

Agent009 - 4/12/2010 4:48:05 PM

+1 Boost

In about 5 years after all of the class action suits and claims from other sources.

All in all I wonder if they have fired the responsible parties for circumventing the system. It seems like they stand to lose far more than they ever gained.

uaw_lax - 4/12/2010 6:53:35 PM

+1 Boost

oops!!

thetruth01 - 4/12/2010 9:00:33 PM

+6 Boost

Wouldn't any insurance company have to prove that the car crashed due to the pedal or mat?

nguyenvuminh - 4/12/2010 10:15:47 PM

+5 Boost

009 - good points on both issues about 1) insurer has the right to pursue those the court ultimately deem to be negligent and 2) listening to the right person or taking timely corrective action would have reduced the damage.
huu - your scenario may ultimately turn out to be true but it's just speculation at this time. I would think insurers have sufficient legal counsel resources to determine it's worth their time to go after the seemingly negligent party. Unless you're a lawyer and see they have no shot in hell on this matter.