Allstate Sues Toyota Over Accident Claims from Acceleration Flaw

October 5, 2010

Allstate Insurance Co. has sued Toyota Motor Corp., seeking to recover more than $3 million the insurer and affiliates paid in claims for accidents linked to unintended acceleration in Toyota vehicles.

The lawsuit, filed last Friday in Los Angeles Superior Court, marks a relatively new front in the wave of U.S. civil litigation piling up against the Japanese automaker for economic losses stemming from complaints about Toyotas that have sped out of control and crashed.

“We are expected to be one of several insurance companies that are taking this action,” Allstate spokeswoman Christina Loznicka told Reuters on Monday.

Echoing claims in a major class-action consumer suit pending in federal court against Toyota, the Allstate complaint says the automaker long ignored evidence of acceleration problems in its vehicles and failed to install a brake override system that would have prevented accidents.

The Allstate action asserts, as have other lawsuits, that acceleration flaws were rooted in a defect in an electronic throttle system Toyota introduced in the 1990s, and that Toyota “essentially hid the problem” instead of recalling the cars or changing the design.

“This has resulted in numerous claims of instances of property damage and injuries, including in some instances fatalities,” the suit says.

Claims paid by Allstate and affiliates to policyholders or third parties for accidents involving unintended acceleration in Toyotas total more than $3 million, according to the suit.

That sum is a fraction of the $10 billion in total potential U.S. civil liability Toyota is estimated to face overall from unintended acceleration. But similar suits from other insurance carriers are bound to multiply the effect of such subrogation claims.

Toyota spokesman Steven Curtis said on Monday the company had not seen the Allstate complaint, but “based on reports we believe the unfounded allegations in this suit have no basis.”

Toyota has insisted the only defects causing its vehicles to speed out of control were ill-fitting floor mats and sticking gas pedals — both addressed in safety recalls encompassing 5.4 million U.S. vehicles.

The automaker has staunchly denied that an electronic glitch of any kind is to blame for its acceleration problems.

But the unprecedented magnitude of the recalls has damaged Toyota’s once-sterling reputation for safety and reliability in its largest market.

Toyota’s North American manufacturing arm said on Monday that consumer complaints regarding unintended acceleration have dropped 80 percent since April, when it instituted a new approach to handling those complaints.

The National Highway Traffic Safety Administration is investigating reports that as many as 89 crash deaths since 2000 may be linked to unintended acceleration in Toyota cars.

(Editing by Bernard Orr)

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