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Pennsylvania insurance commissioner explains auto recalls' effects on insurance policies

Posted On Wed, March 17, 2010

In the wake of the recall of more than 400,000 vehicles by Honda this week, some drivers may be wondering how their insurance may be affected if their car is defective.

According to Pennsylvania Insurance Commissioner Joel Ario, vehicle recalls are a common enough occurrence that insurers have developed ways to deal with them properly. While it is unlikely that one's insurance policy will be adjusted if the car in question is recalled for a safety defect, the failure to act on a recall by the customer could qualify as "negligence" and result in less of a pay-out following an accident.

Additionally, acting negligent with one's vehicle could be reason enough for an insurer to not renew a policy once it expires.

"Each week, we learn more about safety problems with certain vehicles, raising many consumers' concerns about how that might impact their own auto insurance," said Ario. "Insurance companies cannot cancel coverage or deny a claim because you drive a recalled vehicle. However, consumers are encouraged to respond to recall notices by having your car serviced."

In the event of a recall, Ario added that insurers may choose to re-file their model ratings to affect their comprehensive and collision aspects of a policy regarding a model.
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