State Farm and Allstate – the largest and second-largest auto insurers in the U.S., respectively – confirmed this week that they have begun the subrogation process with claims for Toyota vehicles subject to the automaker’s recall of 7.7 million vehicles for gas pedal issues, National Underwriter reported.
Mike Siemienas of Allstate told National Underwriter that the insurer told Toyota “we have claims that we believe are the result of a product defect.”
State Farm, which said in February it was considering subrogation action, declined to comment further to National Underwriter.
Progressive, meanwhile, told the insurance publication that it’s “continuing to review claims and subrogate as necessary,” while Toyota declined to comment.
The automaker’s total payouts on insurance claims could reach $30 million, Mark Bunim, a lawyer with mediation company Closed Case, told USAToday. The federal government recently fined Toyota $16.4 million for failing to report the gas pedal issue within five days of its discovery.
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.
More information:
• State Farm Examines Toyota Claims for Subrogation
