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.
2010 New York Auto Show Photo Gallery
2011 Ford Mustang Photo Gallery
Geneva Motor Show Photo Gallery
Read Article