Automobile Recalls: Insurance Claim Investigation & Adjusting

Recently, there have been millions of recalls at General Motors and Toyota involving millions of automobiles.  If you’re an insurance claim professional there should be a list of questions running through your mind about what this means should you end up handling a claim involving one of these vehicles.  This article reviews basic information on how to handle conditions from a first-party loss documentation perspective.  The vehicles affected are:

  • 2010 Toyota Prius – Brakes
  • 2007-2010 Pontiac G5 – Steering
  • 2005-2010 Chevrolet Cobalt – Steering
  • 2005-2006 Pontiac Pursuit (Canada) – Steering
  • 2005-2006 Pontiac G4 (Mexico) – Steering

If you are assigned or end up with an auto liability file that involves one of these vehicle there are a few factors involved you might want to consider before proceeding.  First, make sure you have taken the time to protect your liability after acceptance of the file.

The most important factor to remember when dealing with an auto recall, or any claim, is to remain impartial.  Prevent you or your adjusting staff from jumping to conclusions about a brake, steering or other mechanical failure by emphasizing the amount of money or damages are not an issue – only the preservation of fact is important.  Insurance liability claims involving auto recalls should be regarded as a very thin sheet of ice because often times claim professionals jump to conclusions about a particular part failing and contributing that as the primary cause of the accident.  Part failure from auto-recall be the primary origin but that is not always the case.  Even if it was the contributing factor, it’s important to documents other circumstances you would normally document in an auto collision such as road conditions, weather conditions and other physically identifiably characteristics surrounding the loss such as tire tread depth.

The truth is that many loss investigators don’t know what their client does behind closed doors.  Insurers are becoming keen to indemnifying their insured then going back to recover their loss silently.  This means that they are relying on all of the little elements you may have come across at an accident scene involving one of these automobiles.

From an insurer’s standpoint, these manufacturers are already eating dirt with the massive expense of a recall. A self-insured entity such as an auto manufacturer is going to spend some serious dollars denying claims because each claim is evidence against them in a class action – the last thing they want and the first thing every hot dog attorney in America has their mind on.  Protect your liability by documenting all of the facts in an auto recall case, not just the ones that seem obvious or evident.

Another viewpoint are the claims that may spawn as a result of a failed part.  For example, a recalled vehicle driven by Mary is traveling on a highway at or near the speed limit and loses control because the expected resistance in a power steering mechanism became greater in the midst of a lane change, according to that driver.  A nearby driver, Joe, anticipates the recalled vehicle traveling into his lane and makes a fair judgment to move out of the way, thereby causing another accident.  A witness, Kim, has an account of the entire event.  It’s true that the Joe caused the accident but his insurer has a right to attempt recovery of their loss (subrogate) because the Mary essentially created a tort in negligence when failing to control her vehicle.  The recovery odds are slim given these circumstances but they are possible – particularly if the drivers were carrying super-loads of cargo and caused damages exceeding $100,000.00.  Since there was no collision between the Mary and Joe, however, Joe’s insurance would likely subrogate the manufacturer directly – providing all the details were in place.

You can help your client by providing these important details that are relevant to both the accident and the recall – not just some of them. The sum of dealing with auto-recalls is that the evidence often require a specialized and elevated level of care that most adjusting firms overlook.  Don’t let you or your subrogation department be stuck in the office late because your independent adjuster failed to give you all of the details.  Peak Claims thrives on reporting pertinent details that our competition fails to document – help your subrogation or legal team of attorneys achieve their maximum potential by contacting Peak for your investigative needs today.

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