As recalls and manufacturer defects continue to raise questions about Toyota vehicle safety, owners may worry that auto-insurance premiums may be affected, too.
Not necessarily, experts say.
Yes, insurance companies are closely monitoring the developments that led Toyota’s chief global executive to testify before Congress on Wednesday. But experts say the ongoing drama may not result in either markedly higher, or lower, insurance premiums for Toyota owners.
There is still too little known about the true extent of problems afflicting the vehicles, including popular versions of the Camry, Lexus, and Prius. But so far, the reported problems appear statistically too small to yield massive changes in insurance premiums.
“I don’t think it’s that big of an issue from an auto-insurance perspective,” said Michael R. Powers, professor of risk and insurance at Temple University’s Fox School of Business.
Powers said rates might increase “only very slightly,” but they could also be offset by declining resale values of some Toyota models as a result of the crisis.
In other words, it could cost a bit more to insure against accidents, while costing less to replace the vehicle in the event of a crash.
Full accident data about instances of unintended acceleration, braking problems, and floor mats remain unknown, and Toyota has not yet proclaimed a definitive resolution for all of the issues identified with some of its models, which means action from insurers would be premature, officials said.
“We, like everybody else, are looking very carefully at just how big the problem is, just how dangerous it is, just what the exposure is,” said Sam Marshall, president of the Insurance Federation of Pennsylvania, an industry trade group.
FULL STORY: http://www.philly.com/philly/business/homepage/20100226_Toyota_problems_unlikely_to_hike_insurance.html
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