Report: State Farm asks Toyota to pay for unintended acceleration insurance claims

Back in September of 2007, State Farm sent a letter to Toyotaasking that the Japanese automaker pay for an insurance claim for a 2005 Camry that had reportedly wrecked as a result ofunintended acceleration. According to a report in USA Today, State Farm wrote, "we are aware of several complaints to your company of sudden acceleration involving the Toyota Camry." The National Highway Traffic Safety Administration was copied on the note, and the government agency wrote back to State Farm stating that it had been looking into unintended acceleration claims since August of 2006, but the investigation had been closed.


State Farm wasn't reimbursed back in 2007, but in light of Toyota's recall of 7.7 million vehicles for acceleration-related issues, the insurance company is taking a second crack at getting cash from Toyota. The process of an insurance company receiving money from an automaker is called "subrogation" and USA Today says Toyota spokesman Brian Lyons told the national newspaper that the process is fairly common. 

Common or not, State Farm can recoup up to $30 million from Toyota, and the insurance company says customers involved in unintended acceleration crashes in a Toyota could get their deductible cash back, which can range from $250 to $1,000 or more. However, customers shouldn't expect money any time soon. Case Closure mediation attorney Mark Bunim reportedly told said that the process could take some time to resolve as someone would need to check every Toyota claim and determine whether the accident involved sudden acceleration. 

If Toyota doesn't pay for the insurance claims, the automaker could indirectly foot the bill with higher insurance premiums. Due to Toyota's otherwise strong quality and safety reputation, its vehicles are currently relatively inexpensive to insure. If Toyota pays State Farm for accidents involving unintended acceleration it's a near guarantee that other insurers will follow suit.

Another Civil Penalty Coming for Toyota?

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  House Oversight and Government Reform Committee member Rep. Dan Burton, R-Ind., holds up car accelerator pedal as he questions Transportation Secretary Ray LaHood, on Capitol Hill in Washington, Feb. 24, 2010, during the committee's hearing on Toyota.  (AP Photo/Pablo Martinez Monsivais)

• STORIES
• Toyota Executive: "We Need to Come Clean"
• Toyota Warned Europe of Pedals Weeks Before U.S.

(AP)  The government said in a letter to Toyota that it's considering a second civil penalty against the automaker.

Toyota is already facing a fine of more than $16 million for failing to promptly notify the government about defective gas pedals.

The Transportation Department told Toyota in a letter this week that accelerator pedals involved in the recall exhibited two separate defects that may require two separate remedies.

Toyota Executive: "We Need to Come Clean"

The government also said if there weren't a cap of about $16.4 million on fines, Toyota could have faced civil penalties of $13.8 billion. That's because the government could fine the company $6,000 for each of the 2.3 million vehicles under recall.

Toyota has recalled more than 8 million vehicles worldwide.