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Insurance industry

Toyota Faces Subrogation Suits from Insurers Over Sudden Acceleration Claims

Strategic Insights

— 1 min read

Toyota Motor Corp. is facing additional subrogation suits from seven insurers, including Allstate Corp., to recover costs related to accidents attributed to sudden acceleration problems. The insurers, which have filed the suits in Los Angeles County Superior Court, accuse Toyota of negligence, product liability, fraud, and breach of warranties. The suits seek damages of more than $230,000 related to 14 crashes and cite Toyota's alleged failure to include a fail-safe measure to instruct the electronic throttle control system to reduce the engine to idle when brakes are applied without success.

Key Takeaways:

  • Seven insurers, including Motorists Mutual Insurance Co., American Hardware Mutual Insurance, and Ameriprise Insurance Co., have filed subrogation suits against Toyota Motor Corp. in Los Angeles County Superior Court.
  • The suits accuse Toyota of negligence, product liability, fraud, and breach of warranties, seeking damages of more than $230,000 related to 14 crashes.
  • Toyota has already faced a similar lawsuit from Allstate Corp. in October, seeking more than $3 million for claims related to sudden-acceleration problems.
  • The insurers cite data compiled by Safety Research and Strategies Inc., which shows that Toyota sudden-acceleration incidents have accounted for at least 725 crashes.
  • Toyota spokeswoman Celeste Migliore stated that the allegations in the suit have no basis and that subrogation claims are common between insurers and auto makers.
  • The suits allege that Toyota failed to include a fail-safe measure to instruct the electronic throttle control system to reduce the engine to idle when brakes are applied without success.

Statistics:

  • 14 crashes related to sudden acceleration problems are cited in the suits.
  • Damages sought by the insurers exceed $230,000.
  • Toyota sudden-acceleration incidents have accounted for at least 725 crashes, according to data compiled by Safety Research and Strategies Inc.
  • Allstate Corp. faced a similar lawsuit in October, seeking more than $3 million for claims related to sudden-acceleration problems.

Sources:

  • A. M. Best, "Seven Insurers Join Allstate in Suing Toyota," Jan 07, 2011.
  • Safety Research and Strategies Inc., cited in the lawsuits as a source of data on Toyota sudden-acceleration incidents.
  • Comtex SmarTrend Alert, an automated pattern recognition system, for SMART TREND information on ALL and TM shares.

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