From BodyShopBusiness Magazine

State Farm said it is considering subrogation action against Toyota for auto claims that occurred due to vehicle defects that have been the subject of a major recall of Toyota vehicles. Subrogation refers to an insurance company seeking reimbursement from the person or entity legally responsible for an accident after money has been paid out on behalf of the insured.

The Bloomington, Ill.-based insurer told USA Today it had notified the National Highway Traffic Safety Administration about possible acceleration issues in Toyota and Lexus models back in 2007.
Kip Diggs, State Farm spokesman, told NU Online that subrogation is an option for the insurer if it can show the product was partially or fully to blame for a given auto claim.

Last week, Allstate said as part of its standard process on recalls it would be looking at accident claims on the affected Toyota automobiles, and Mark Bunim, president and chief executive of Case Closure, a New York-based insurance arbitration and mediation firm, told NU Online he would expect that all large auto insurers would examine claims involving Toyotas over the past five or six months to see how many are tied to or could be tied to the gas pedal recall.

“Then they are going to try and subrogate. And why not?” Bunim said.

Diggs said it is too soon at this point for State Farm to have started the subrogation process on any specific auto claim, but he said subrogation is something that is standard within the industry and would be a consideration going forward.

“Any time a claim is filed, that’s one of the things we look at – to see if there is a subrogation issue there,” Diggs said.

Regarding the Toyota recall specifically, he said, “[Subrogation] is something that we’re considering.”
Meanwhile, the Property Casualty Insurers Association of America (PCI) said the recall should not result in higher insurance rates for Toyotas.

“Looking forward, it is unlikely that rates would be affected by the recall,” said Robert Passmore, senior director of claims for PCI. “Over the years, Toyotas have developed a good safety record as evidenced by the popularity of their vehicles, so it is unlikely that there will be enough accidents caused by the faulty pedals that rates will increase. Insurers look at the cost of claims over a period of time for a vehicle. They are interested in how much it costs to repair a vehicle and how often the vehicle is involved in an accident." 

He further advised owners of Toyota vehicles to follow the manufacturer’s instructions regarding the recall and contact a dealer without delay if they have any gas pedal issues.

“In the rare occurrence where the recalled part causes an accident, the driver’s automobile liability or physical damage insurance will provide coverage. If the pedal is a factor, the insurer will pay the claim for the driver and then likely seek to be reimbursed by Toyota," said Passmore.

Actual legal actions against the carmaker on behalf of persons injured or killed from defects have been mounting, and The Law Journal listed more than a dozen class actions alleging Toyota failed to properly disclose mechanical problems. It also said shareholder suits were likely to argue the company’s stock value had fallen as a result of the negative publicity.