State Farm Sues Ford Over Vehicle Fires
State Farm Insurance Co., the nation’s largest auto insurer, filed a lawsuit Tuesday against Ford Motor Co. seeking to recover potentially millions of dollars in claims for vehicle fires caused by defective ignition switches.
The suit, filed in U.S. District Court in Los Angeles, said that Ford has “systematically” refused to pay the insurance company for fires caused by the switches.
Ford attorneys said the lawsuit was “without merit,” adding that it was similar to a State Farm complaint dismissed last year in a related federal lawsuit in New Jersey.
Last year, Ford agreed to recall 8.7 million vehicles equipped with the bad switches built between 1988 and 1993. It was the largest recall ever by a single auto maker.
Some safety groups believe the recall should have been broader, maintaining that the faulty switches are in as many as 26 million 1983-1993 Ford vehicles. Ford, however, says the other older vehicles have a different switch that does not pose a fire hazard.
State Farm, headquartered in Bloomington, Ill., does not know how many Ford ignition switch fire claims have been paid nationwide, but said in California alone the company has paid more than $440,000 involving 80 vehicles. State Farm officials said the suit was filed in California because of the large number of claims.
“We are seeking to recover the cost for settling these claims, as well as deductibles paid by policyholders,” said State Farm spokesman Ed Domonsky.
State Farm said that Ford rarely acknowledges that a vehicle fire was caused by a part defect and instructs dealers to take complaints of fires to their insurers. It also charged that Ford uses “stonewall” litigation tactics in an effort to discourage costly legal proceedings.
Ford attorney John Harris said the suit is State Farm’s latest attempt to force a mass settlement of fire claims. He said each claim must be evaluated on a case-by-case basis to determine if the fire was due to the ignition switch or another cause. This requires extensive documentation, including photos, police and fire reports, and having the damaged vehicle available for inspection.
“In the vast majority of cases, particularly with State Farm, that information is not available,” Harris said.
In addition to Ford, the suit names as a defendant a subsidiary of United Technologies, which made the switches.
The ignition switches prompted four investigations by the National Highway Traffic Safety Administration, beginning in 1991. Three were settled with no finding of defect, but the last prompted a voluntary recall.
At the time of the recall, Ford said that they knew of 1,000 ignition switch fires in the United States and 900 in Canada. There were 28 minor injuries linked to the fires.
Many fires involved vehicles that were parked and shut off for hours. In many cases, the vehicles were total losses.
The lawsuit alleges that Ford and UTA had known about the defect in the late 1980s, but concealed it from the public and safety regulators. Ford has denied the charges.
