Insurance companies are gearing up to recoup from Toyota money they paid for claims in crashes involving sudden acceleration, the subject of major safety recalls by the Japanese automaker. It could also mean money back for some drivers who paid deductibles.
At least six major insurers, including State Farm Insurance Cos., Allstate Corp. and Geico, have begun examining past claims involving the recalled vehicles, which number about 6 million in the U.S. and 8 million around the world. Insurers can request that Toyota pay them for the claim if a vehicle defect is proven to be a key factor in a crash, a long-standing industry practice known as subrogation.
Many insurers have begun notifying Toyota Motor Corp. that they will do just that.
"We're seeking to have them share in some of the financial liability, because part of it is their fault,'' said State Farm spokesman Phil Supple.
The move could repay some Toyota owners their out-of-pocket costs due to crashes but probably wouldn't have much of an impact on the premiums drivers pay. And it would mostly involve crashes in which people weren't seriously injured, because those cases frequently find their way into lawsuits.
Insurance companies typically refund deductibles -- the amount a policyholder must pay before the insurance takes over -- to their customers when they are repaid in such cases, officials of several companies said this week. None would release any financial estimates or the number of potential crashes, but given the sheer size of the Toyota recalls the liability could be in the millions of dollars.
State Farm has sought reimbursement from Toyota in cases where cars have sped out of control on their own at least as far back as 2007, according to a letter the company provided to federal regulators. The letter, dated Sept. 18, 2007, sought a formal Toyota investigation into a crash involving a 2005 Camry that surged forward at a stop sign and hit another car.
"We are aware of several complaints to your company of unexpected or sudden acceleration involving the Toyota Camry,'' the letter says. "Please accept this letter as notification of State Farm's rights of recovery for the damages we paid to both vehicle owners.''
Toyota issued a limited floor mat recall in 2007, but it didn't cover the 2005 Camry at issue in the State Farm letter. In the past few months, the automaker has issued two unwanted acceleration recalls for several of its popular models, one to fix floor mats the company says can jam floor pedals and one to repair what it calls a problem with pedals that can stick. Prius hybrids have also been recalled for brake issues.
A Toyota statement declined comment on the insurers' attempt to recoup claims but added it was "a common practice in the automotive industry,'' which was echoed by Allstate spokesman Mike Siemienas.
"This is business as usual for Allstate,'' he said.
Experts say most insurers have agreements with automakers to negotiate a confidential settlement over defect-related claims -- and automakers such as Toyota usually have insurance to cover most of the costs. Toyota declined to comment beyond its statement.
"It will be a whole bunch of small claims. What you have here are the fender benders,'' said Mark Bunim of the mediation firm Case Closure LLC in New York. "The major claims, where someone's a paraplegic, they will not be part of that group.''
Not every accident in a recalled Toyota can be blamed on a defect like sudden acceleration, said Insurance Information Institute spokeswoman Jean Salvatore.
"Just because you drive one of the cars that was recalled doesn't mean the accident was caused by the faulty accelerator,'' she said. "It would have to be determined that the cause of the accident was because of the defect.''
That can take a great deal of time, particularly with such a large volume of recalls. The paperwork for each potential claim is painstakingly reviewed on a case-by-case basis before the insurer submits it to the automaker for possible reimbursement.
Salvatore also said vehicle recalls by themselves usually have little impact on whether a driver's insurance premiums will rise. She said there are so many other factors, such as a person's driving and credit history, the car's safety record in crashes, whether the vehicle is frequently targeted by thieves, and so on.
"So, it's very difficult to say that rates will go up or down because of this,'' she said.
The National Highway Traffic Safety Administration has linked 52 deaths to claims of sudden acceleration in Toyotas, and more than 100 wrongful death and personal injury lawsuits have been filed against the automaker around the country. Those are being consolidated before a California federal judge for pretrial matters along with more than 130 lawsuits filed by Toyota owners claiming their cars have lost value since the recalls. An initial hearing is set for May 13.
Despite the lawsuits, Toyota reported March sales of new vehicles rose 41 percent compared with February numbers. Toyota has mounted an aggressive advertising campaign to counter the negative impression left by the recalls and offered sweet deals such as 0-percent financing, cheaper leases and free maintenance for some customers.
Many of the lawsuits contend problems with Toyota's electronic throttle control are the true culprit in the sudden acceleration cases, but the company has insisted electronics are not to blame.