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.
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.”