Over the past few years, auto insurance companies in the U.S. have paid out approximately six million claims related to accidents involving the popular hybrid Toyota Prius. You may remember that the vehicle was the subject of recalls because of an accelerator problem that caused the car to suddenly accelerate out of control. State Farm, Allstate and Geico as well as three other major insurance companies and a number of smaller ones are now going after Toyota Motors for the money they have paid out in claims to policyholders in connection with these accidents.
It’s About Fault
In most cases, collisions are due to operator error or carelessness; weather or road conditions often play a part as well. Unless drugs or alcohol were involved, some term of the policy was violated or there was fraud involved, the insurer is obligated to pay out the claim according to the agreement outlined in the declarations.
If the accident was attributable to a built-in mechanical defect however, the manufacturer bears ultimate liability – and the insurer can request compensation from the company that produced the defective vehicle. In insurance industry parlance, this is called subrogation.
Who May Benefit
Toyota Prius owners who paid deductibles (the out-of-pocket amount an insured must pay out before the insurance kicks in) will likely get reimbursed by their auto insurer once they receive compensation from Toyota. This will include vehicle owners who suffered damage to their vehicles, but were not injured themselves. The reason is that injury cases involving vehicle defects usually result in a tort action against the auto maker. According to an industry journal, there have been a little over 100 wrongful deaths and injury cases attributable to the acceleration problem; these cases have been consolidated with 130 other tort actions from Prius owners claiming loss of value over the recalls. These cases are currently in the discovery phase before a federal judge in California.
It Will Take Time
It should be noted that not every accident involving a Toyota Prius was necessarily due to a sticky accelerator. The reimbursements will apply only to those claims that were specifically due to the mechanical defect. Of course, over the past few years, there have literally been millions of recalls and accidents. Because the resolution is specific to the situation, each one of these cases will have to be examined – one at a time.
Will Premiums Rise For Prius Owners?
This is difficult to say, but the answer is probably not. Recalls on a specific make and model have much less to do with premiums than one’s personal driving record, geographic location, the vehicle’s age and safety record, the number of miles driven annually and how popular the vehicle is with auto thieves.
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