With recent news concentrating on Toyota’s product recall, I thought a few words on the subject could prove helpful.
In the event that your vehicle contains faulty equipment and has to be repaired by the dealership, your auto policy wouldn’t come into play. The cost of repairing the manufacturing defect on your car would rest on the shoulders of the manufacturer.
On the other hand, if you caused an accident because of the defection that was being recalled, your auto policy would be important. In this event, your auto insurance would need to have the proper liability limits to cover the damage to property and people.
Your insurance company would pay the claim and then start a process called subrogation. This process means the insurance company would seek payment from the auto manufacturer to cover the amount the insurance company provided for the accident.
Remember: Even though the accident is not your fault, until the subrogation is complete (which can take a while), the accident will be on your record with the insurance company!
This can cause your policy premium to increase. Good agents have the ability to communicate with their insurance companies and follow the process of subrogation in the goal of eliminating the accident from your insurance record.
