State Farm wants Toyota to reimburse it for its payments to auto insurance policyholders who suffered damages from crashes caused by unintended acceleration of the automaker’s vehicles.
Other companies are likely to follow State Farm in making the requests, according to USAToday, which reported that Mark Bunim, a lawyer with Closed Case, a mediation company, estimated Toyota’s total payouts on insurance claims could reach $30 million.
If Toyota doesn’t pay the claim of State Farm and any other auto insurers who make the request, the insurers are likely to increase the rates for insuring Toyotas, State Farm told officials told the newspaper.
The automaker has been fighting problems for several months. It recently recalled about 7.7 million vehicles after reports of sudden acceleration, either because floor mats jammed gas pedals or pedals stuck. It closed its dealerships for days to await a fix, and last week, it was fined $16.4 million for violating a requirement to report problems with the gas pedals to federal officials within five days.
The newspaper said State Farm requested in a letter, sent to Toyota and the National Highway Traffic Safety Administration in September 2007, that the automaker pay for claims in an accident involving a 2005 Toyota Camry where the owner had reported sudden acceleration issues to her mechanic twice before the accident occurred. The NHTSA told State Farm in its reply that it was investigating similar complaints, dating back to August 2006.
Toyota did not reimburse State Farm, the newspaper reported, saying the NHTSA closed its investigation April 3, 2007.
Seems crazy that a company with $61.6 billion in revenues and $3.66 billion in net income (2007) is wasting time and effort suing Toyota for some share of a potential $30 million payout.
There business is based on taking risks and insuring people and property.
I hope it's not just me that thinks this lawsuit is ridiculous.
It's this kind of attitude that is the reason a certain country's debt is out of control. $30 million is not something State Farm is just going to ignore. It's a huge sum of money. For a company that is trying to be profitable, to spend a Million dollars to have a pretty good shot at $30 million plus recovering their lawyer fees is a pretty good investment.
why not... If they are a bigger liability for the insurance company...
here dodges pay a premium cause of the lack of a good security system... it is about $500-$1000 cheaper to insure a Chev here over a Dodge. It is common knowledge now Toyota has a propblem with their vehicles, so as an insurance company insuring that car is a bigger risk, more liability, more liability for someone to sue, making the insurance company pay out bigger claims.
Or should the raise rates for EVERYONE cause of toyotas problem.
It's good business and it's being duly diligent to protect itself from its own shareholders for State Farm to at least ask Toyota for reimbursement. Nothing ventured, nothing gained.
I agree though that based on the very isolated instances which might be proven ( very doubtful ) that to recoup these losses they might bump rates $1-$3 per 6 month period....IOW no effect.
I think this is a win-win because either Toyota pays up and is out lots of money, or owner's rates go up and cause them to think twice next time they buy a crap-mobile.
I'm not fond of Yota ....But State Farm are retards ..... isn't insurance for such things?
The right thing to do would be to increase rates on the cars that are higher risk.
It would be the same if the insurance companies sued GM for making the Camaro so quick causing people to drive them more agressively and causing some accidents ...WTF? ...what a stupid law suit
I don't like big insurance companies and I think they have numerous ways to screw their customers. But at the same time, I don't think it's necessarily fair for them to have to pay out to cover someone else's mistake. I understand that manufacturer defects are going to happen that will at times cause accidents that insurance companies will have to pay out for. When a car company knowingly sells defective products then does all it can to hide and cover up the problem, how is that State Farms problem? The insurance is for the driver of the car, the warranty is for the car itself.
And it's not even close to the same thing as the Camaro example. An idiot behind the wheel of a powerful car caused the accident. The key is the accident was caused by the idiot, not the car. With the Toyota, a known defect that went un-addressed by the manufacturer caused the accident. The Camaro isn't defective, the Camry is.
I like it go state farm, the reason is simple if they let this go they are going to hit everyone premium wise, not that they have not already but much more if they sit on their hands. Also Toyota drivers should pay more, much more. Remember the government ignored state farm when they said there was a problem, of course it's a conspiracy.
Well I knew they were slightly disappointed when I went off to college and started paying just $140/year for insurance, but I didn't know they needed money that badly. :lmao:
I don't like big insurance companies and I think they have numerous ways to screw their customers. But at the same time, I don't think it's necessarily fair for them to have to pay out to cover someone else's mistake. I understand that manufacturer defects are going to happen that will at times cause accidents that insurance companies will have to pay out for. When a car company knowingly sells defective products then does all it can to hide and cover up the problem, how is that State Farms problem? The insurance is for the driver of the car, the warranty is for the car itself.
And it's not even close to the same thing as the Camaro example. An idiot behind the wheel of a powerful car caused the accident. The key is the accident was caused by the idiot, not the car. With the Toyota, a known defect that went un-addressed by the manufacturer caused the accident. The Camaro isn't defective, the Camry is.
Why should any insurance company have to pay out due to a manufacture's error? Yes, they should go after Toyota & raise the rate of the affected policy holders until it is a fact this is over. High risk cars always carry higher premiums, Camaro included.
The very nature and purpose of insurance is to cover for mistakes, and that includes the mistake of buying one of those cars IMO.
I have very little sympathy for Ins co's ........ they make wayyyy to much in the first place, and they have dirty tactics in dealing with their customers as well. What they need to do is raise rates for these cars. I'm sure a $5 premium on every Toyota will cover pretty much anything they have ever had to pay out.
Remember that the next time you take a vehicle in for warranty work. Just cause it broke, why should the manufacture pay for the repair under warranty?
I've used State Farm for over 20 years, they have never let me down. Never raised my rates (even with a stolen truck). I get semi annual rate deductions. This shows me they are looking out for their customers.
If you're dumb enough to buy a Toyota death car you deserve to get your insurance jacked.
If you don't like it, get a different car or different insurance company.
i think some people here are missing the point this auto maker blatantly and intentionally lied to the american public. i can't believe people are defending them. yes insurance is for accidents, not intentional ones caused by the manufacturer, i could understand if they would have come clean at the begining, but your talking years of hiding and trying to silence the issue. it shows they could give 2 $hit$ about the american public. geez where the hell is love for this country?
I have State Farm. I've had them since I started driving in 1993, and my parents have had them since the early 1980s. They now insure my car and my house. I would not switch to anyone else even if I could save a few bucks. They are dilligent, take care of their customers promptly, do not cause problems for you, and when I was in an accident about 13 years ago they took care of everything hassle free to my satisfaction. My agent is great.
If SF wants to persue Toyota in this measure, more power to them. Toyota should pay for any damages resulting directly from their recalled pedal issues, and if they don't pay SF or other insurance companies, and they start to raise rates on Toyotas, Toyota will know that can hurt sales if people know their rates will go up if they buy a Toyota.
Those of you who think SF is just a money gubbing big conglomerate insurance company, wait till you have a major insurance claim with whomever your insurance is through. Not all of the others are bad, but there are many cut rate companies who do in fact provide cut rate service.
State Farm is a mutual insurance company. Typically a portion of the profits come back as dividends to their policy holders. The question is this: If it's Toyota's fault, why should State Farm or their customers have to pay for it?
Were they a publicly traded company, not suing Toyota could result in a lawsuit from their shareholders (kind of like what happened to Toyota last month)
Has any court in the USA found Toyota guilty or there cars even faulty?
if not SF would be charging extra for perceived risk and if they got away with it what is stopping them from preemptively raising rates on other cars that MIGHT be unsafe IE COBALT with Power steer fault or ford with Ign fires or the excessively high potential repair costs on VOLT?
it will change when a court or DOT etc proves guilt or major fault
State Farm has a duty to all its policy holders to go after the at fault party to keep premiums lower. Premiums go up for several reasons like not being able to collect from uninsured "at fault" claimants and when not successful when going after at fault parties or carriers. Policy holders should be happy insurance companies try to make this right.
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