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Will my car insurance company total my car due to a defective part?

Question:  If my car has a class-action lawsuit against the manufacturer for a defective part, will the insurance company total the car and pay the claim if I have full coverage insurance?

Answer: A defective part on its own will not cause your car insurance company to total out your vehicle. Your physical damage coverages, of collision and comprehensive, pay out only if your car is damaged in a covered accident, not for defective parts.

If you are in an accident that was caused by a defective part, then the insurance company will look at the damage to the car caused by the accident, as well as the defective part, to decide if it is a total loss.

For your car to be a total loss, it would have to be unsafe to fix or uneconomical to repair. For example, if the cost to repair your car is 80 percent of its actual cash value (ACV), then typically it will be totaled out.

As part of the auto insurance claim investigation, your car insurance company won’t only look at the defective part, but they will also look at what you did about it.

If you continued to drive your car for a substantial amount of time after being aware there was a defect, it’s believed that you understood the risks and didn’t take due care. For this reason, your car insurance company may be able to turn down claims for your vehicle if the defect causes you to crash.

Now, if a recall for the part came out after the accident or if there is a class-action lawsuit against the manufacturer for a part that hasn’t been recalled (but is believed to be defective), then your claims should be accepted.

If your insurance company has to pay out for claims due to an accident caused by a defective part, and you aren’t found negligent, they should have the right to subrogate with the manufacturer. This means they will go after them for the monies they paid for your claim that was due to the defect.

Lawyers taking on cases regarding defective car parts say that when auto accidents occur due to a defective part they don’t have to prove that the manufacturer was careless, but that the car maker knew the car part was unreasonably dangerous.

For a car insurance company to have a good case against the manufacturer, it needs to prove that you were operating the car as it was intended to be driven, that the vehicle’s performance hadn't been altered since the original purchase and that the defective part caused the accident.

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