State Farm asks Toyota to repay acceleration claims (costing Toyota from $20 million to $30 million)

[Omaha Steve]

Source: USA Today

By Sharon Silke Carty,

DETROIT — 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 Case Closure, 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.

Read more: http://www.usatoday.com/money/autos/2010-04-12-toyotainsurance12_ST_N.htm

[DURHAM D]

1. Good. I knew this was coming.

The amount is actually lower than I thought it would be.

Maybe my car insurance rates will go down.

[ShockediSay]

6. First the car insurance companies ask for subrogation

Then they sue

[high density]

2. The loss of $$$$$$$$$$ is the only thing that can keep these car companies more honest in the future

I'm no fan of insurance companies but extracting more pain from Toyota is fine by me.

[Sherman A1]

4. Agreed

I too am no fan of insurance companies, but they have battalions of lawyers available to them and are more than happy to use them. Realistically they are the only ones that have the where with all to fund a lawsuit of such proportions and Toyota knows this. It will also serve to put other car makers on notice that they too will be subject to paying for their screw-ups and coverups.

[lynne]

3. Doesn't Toyota have its own insurance for just this type circumstance?

- they should have products/completed operations coverage which is for just this type of claim - where a product manufactured/installed by them is found responsible for a loss.

Good. If they are liable then they - or their insurance carrier - should pay.

[tomm2thumbs]

5. it might not pay out if they can show fraud was committed

I'm guessing there will be a lot of folks trying to prove that Toyota knew everything they were doing and knew the potential ramifications of not correcting the car defects.

[divideandconquer]

7. Here's the smoking gun that they knew

Toyota conspiracy theorists have it wrong

We're becoming a nation of conspiracy addicts. It's not just the shots fired at the Kennedy motorcade from the grassy knoll in Dallas. These days it seems just about everything is up for some wide-eyed explanation, often pointing to some wicked government department or another. Even the Toyota safety scandal.

As a long-time NPR correspondent and commentator, I have spent a lot of time in recent months on the network's chat shows fielding questions about the sudden acceleration phenomenon and the safety of Toyota vehicles. Like clockwork, at least one listener per show will confide the "fact" that the crisis is really a concoction of federal bureaucrats trying to protect Chrysler and General Motors – the Treasury now owning a 61% stake in the latter maker.

That might make for good talk radio fodder, but even if the president himself were hoping to see Toyota stumble, the real facts are these: The Japanese maker's problems with runaway cars dates back long before Washington was asked to bail out Detroit; and as newly-uncovered internal documents reveal, Toyota knew it had a problem and went out of its way to hide that fact as long as possible.

If you aren't convinced by we media scribes, how about taking the word of Irv Miller, the recently-retired head of public relations for Toyota here in the U.S. Towering over the mere mortals of the automotive press corps, Miller seldom missed an opportunity to speak the company's praises – and call out an errant journalist who might have taken an inappropriate shot at the automaker.

To his credit, Miller was equally stern on keeping the story straight behind the scenes, as becomes apparent when you read the e-mails he sent to his Japanese counterparts demanding that they "come clean" on the worsening sudden acceleration mess. The most damning document was sent by Miller to Katsuhiko Koganei on January 16, 2010, in which he used capital letters – the web world's way of shouting – to underscore his concerns.

"WE HAVE a tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models," wrote Miller, just weeks before his retirement. "The time to hide on this one is over," he concluded.
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http://www.autoblog.com/2010/04/12/thedetroitbureau-com-on-autoblog-with-paul-eisenstein/

[Johnboi70]

8. Let's see if a reputable insurance company asks for money!

State Farm is an awful company. I used to work there.