Vehicles under recall for fire-related defects are more likely to have problems serious enough to merit an insurance claim than others being called back for problems that don’t involve fire.
The Highway Loss Institute, a division of the Insurance Institute for Highway Safety (IIHS), examined the rate of non-crash fire claims for vehicles from 2007 through 2012 in vehicles up to eight years old. According to the results, insurance claims for vehicles with fire-related defects (such as electrical issues and fuel system defects) was 23 percent higher than for other vehicles. Following a recall, claim frequency dropped to 12 percent and could potentially be lower if all owners responded to recall notices.
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Last year, automakers recalled almost 22 million cars according to NHTSA data. Most recently, General Motors issued out a recall for 1.6-million vehicles for an ignition switch issue that has caused plenty of controversy and has been linked to a dozen deaths.
“As one would hope, recalls mitigate the effect of fire-related defects,” said Matt Moore vice president at the Highway Loss Data Institute. “However, even after recalls are issued, these vehicles continue to have higher claim rates. This may be a result of people not following up after receiving a recall notice.”