Toyota is back in the news!
Seven insurance companies filed lawsuits against Toyota Motor Corp. in an attempt to recover money they paid to cover crashes associated with sudden acceleration claims. The suits were filed in Los Angeles Superior Court and seek damages for more than $230,000 from 14 crashes in the U.S. But, here's the curious thing about the suit.
Insurers rate risk by the type of car the insured drives. Insurers reason that the owners of "certain cars" are a greater risk. Based on data that is very precise, insurers track the payouts for particular makes and models and the reasons for the payout. For example, insurers know the make and model of vehicles that have an unusual number of tire separations, accelerator problems, etc. Consequently, those owners generally pay a higher premium, a premium that reflects the fact that the insurers consider the vehicle unsafe. Insurers even send the data to the National Highway Traffic Safety Administration, who keeps it secret from the public until the problem becomes subject of a recall. Here's the irony.
Insurers never tell their insureds what they've uncovered about a vehicle, although the insureds premium reflect the fact the insurer considers the vehicle make or model to be a greater risk! Why? Because corporate friendly courts protect insurers by insulating them from liability for failing to notify policyholders about defects in vehicles that insurers track.
Associated Press, The Shreveport Times 01/04/2011 Read Article
Seven insurance companies filed lawsuits against Toyota Motor Corp. in an attempt to recover money they paid to cover crashes associated with sudden acceleration claims. The suits were filed in Los Angeles Superior Court and seek damages for more than $230,000 from 14 crashes in the U.S. But, here's the curious thing about the suit.
Insurers rate risk by the type of car the insured drives. Insurers reason that the owners of "certain cars" are a greater risk. Based on data that is very precise, insurers track the payouts for particular makes and models and the reasons for the payout. For example, insurers know the make and model of vehicles that have an unusual number of tire separations, accelerator problems, etc. Consequently, those owners generally pay a higher premium, a premium that reflects the fact that the insurers consider the vehicle unsafe. Insurers even send the data to the National Highway Traffic Safety Administration, who keeps it secret from the public until the problem becomes subject of a recall. Here's the irony.
Insurers never tell their insureds what they've uncovered about a vehicle, although the insureds premium reflect the fact the insurer considers the vehicle make or model to be a greater risk! Why? Because corporate friendly courts protect insurers by insulating them from liability for failing to notify policyholders about defects in vehicles that insurers track.
Associated Press, The Shreveport Times 01/04/2011 Read Article
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