By on April 15, 2010

More and more Americans have recently detected that they have a rich uncle in Japan. The uncle’s name is Toyota. From LaHood to a bevy of lawyers, all have a yen for Toyota’s money. Latest (but surely not last) to join the fray: State Farm. You know, that same insurance company that had disclosed all those claims to NHTSA and never received an answer. They went public with the story a few days before the congressional hearings. Now we know why: Like a good neighbor, State Farms wants its money back.

“Armed with reports of accidents for which they’ve already paid claims, State Farm insurance has asked Toyota to repay them for any crashes related to unintended acceleration by its vehicles,” reports USA Today. The request for a little Farm Aid is just the beginning.

Other insurance companies are expected to – make that will follow and ask for money. In the trade, this is called “subrogation.” No, it’s not a kinky sex practice. It is a complicated matter on which a Wikipedia has a whole article, in case you are interested. Executive summary: The insurance companies did pay the claim, Toyota is supposed to hold the bag. To the tune of another $20m to $30m. If the insurers get their money back, customers who filed a claim may get their deductibles refunded. (Just make sure that you will.)

State Farm had sent a letter to Toyota in September 2007 asking it to pay for claims in an accident involving a 2005 Toyota Camry. State Farm wrote, “We are aware of several complaints to your company of sudden acceleration involving the Toyota Camry.”

The letter was copied to the National Highway Traffic Safety Administration. The NHTSA replied they had looked into similar complaints, starting in August 2006, and closed the investigation on April 3, 2007. State Farm wasn’t reimbursed.

What if Toyota refuses to pay? Easy, says USA Today: “The cost could trickle down to consumers, who could end up paying higher insurance rates for Toyota vehicles.” This gives the insurers more leverage than the law: Toyotas are cheap to insure at the moment. If it changes, it will hurt sales. Toyota must decide to settle now, or pay later.

Toyota has no comment.

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11 Comments on “Just Like A Good Neighbor: State Farm Joins Toyota Shake-Down...”


  • avatar
    porschespeed

    Excuse me while I get my head around this. So, after all the deaths and accidents that have been attributed to “SUA” nonsense across all the manufacturers, State Farm is just going after Toyota?

    The more one looks at the depth and breadth of these ‘incidents’ across the entire industry, the more it becomes apparent that Toyota had an issue with floormats. Now it just has an issue with people cashing in on that misstep.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=avQgmSFrg58A

    ‘Good neighbor’ like this is why one needs good fences.

    If State farm (and the rest of the vampires) hold all manufacturers to the same standard, then the companies can all fight it out in court fairly. But this is just blackmail, of the most opportunistic stripe.

    • 0 avatar
      tonymart

      Yep, with State Farm as a neighbor you had better be watching your back. I insured with SF for many years. Cars and house. Got a cancellation notice from my agent, whom I did not even know, one day. Seems I had filed statistically too many claims. Three claims in a five year span at a cost of less than $5k. Daughter’s car broken into in driveway and I was burglarized. Called my agent about it and she informs me that according to underwriters I was statistically a bad risk at three claims in less than five years. I stated that the total claim cost was less than $5k and she retorted that yeah that was odd, she had a claim filed that day for over $100k. Guys house burnt. Hmmmm, let’s see, I cost them $5k for three claims, another guy cost them over $100k on one claim and they drop me. Don’t know about you but seems to me the bottom line is hit harder by the house fire than my three claims. I have nothing good to say about SF and am so tired at their BS commercials about “Good Neighbor” Who needs neighbors like SF. They will stab you in the back as quick as you turn.

  • avatar
    obbop

    Corporations had, have and will continue to have vast effects upon our society, culture, political processes, a multitude of aspects of our lives.

    We, the People, need to curb corporate power at some point.

    Freedom and life quality depends upon it.

  • avatar
    b1msus93

    If I were State Farm, I’d do the same.

  • avatar
    CyCarConsulting

    I remember when I had a body shop, State Farm insisted that I use after market, cheap, inferior parts in order to get approval on my estimates. They were unsafe, and could have killed the occupants, if the vehicle were struck in the same area again. In my refusal to do that, and notify the State Farm customers to that fact, State Farm soon dropped me from their preferred repair facility list.
    How many injuries were caused by State Farm, rather than Toyota?

  • avatar
    educatordan

    I don’t know the truth of it but I have always heard that State Farm has gotten out of the home owners insurance business in areas that suffer frequent hurricanes and earthquakes cause they got sick of paying. “Good Neighbor” indeed.

  • avatar
    Steven02

    State Farm’s way of saying I told you so.

    Looks like they were right. If I were State Farm, I would be doing the same thing.

  • avatar
    Cavendel

    I wonder if they will refund any raised insurance premiums due to unintended Toyota accelerations.

  • avatar
    bobby72

    State Farm is the worst insurance company ever!!!!!!!!!!! Wait untill something happens to your car and you will see how soon they will give your money back. though you would probably have to sue them anyway to get it back

  • avatar
    tonymart

    Bobby72
    You are absolutely right, except SF will probably keep your policy intact until the premium has expired then send you a cancellation notice as they did me. With neighbors like them who needs enemies.


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