What You Need to Know About Vehicle Recalls and Insurance
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According to the National Highway Traffic Safety Administration (NHTSA), more than 390 million cars, trucks, and other vehicles have been recalled since 1966 due to safety defects.
With that said, you may be wondering if vehicle recalls can affect your insurance rates. In this guide, we’ll answer questions about vehicle recalls and insurance, including what safety recalls are, the most common types of safety recalls, and how to learn if your vehicle is the subject of one.
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What Is a Vehicle Recall?
An auto manufacturer mandates a vehicle recall for owners to turn in their vehicles to repair due to a newly discovered safety issue. They range from minor to major design and manufacturing errors, like faulty steering wheels and airbags that fail to deploy upon impact.
Vehicle recalls typically fall into three categories: Technical Service Bulletin (TSB), voluntary recall, and mandatory recall.
The difference between voluntary and mandatory recalls lies in who makes them. Voluntary recalls are initiated by the auto manufacturer, and mandatory recalls are mandates by a governing body (e.g., NHTSA) to the auto manufacturer. Both voluntary and mandatory recalls may be the subject of NHTSA investigations.
Technical service bulletins are issued by manufacturers to dealerships and auto mechanic body shops informing service professionals of a new, known issue, providing feedback on how to address the issue, free of charge (if under warranty) to the consumer. They are voluntary repairs by the manufacturer.
Before any vehicle repairs, all mechanics should confirm if a TSB is on file.
Vehicle Recalls and Insurance: How Does It Affect Rates?
Generally, recalls do not raise insurance rates.
However, if owners do not address vehicle recalls in time, insurance policies may be subject to higher rates due to safety concerns or lowered safety ratings. The lower the safety ratings, the higher the premiums. That said, it is imperative not to ignore safety recalls and to address the fix as soon as possible.
What Information Does a Safety Recall Contain?
The NHTSA requires that all auto manufacturers provide the following information as part of a recall.
- Vehicle part affected
- Description of the issue
- Procedures for fixing/repair
- Recall schedule
Should I Notify My Insurance Company of a Recall?
Once your vehicle’s manufacturer has performed all repairs on the faulty part or parts, we highly recommend providing your auto insurance company with proof all necessary repairs were made to prevent rate increases.
Note the cost of repairs does not fall on the insurance company but on the vehicle manufacturer.
All in all, never, ever ignore an electronic recall notice or recall letter by mail. Even a tiny drop in a vehicle’s safety rating could cause your premiums to increase.
Who Issues Recalls?
The NHTSA or auto manufacturers direct recalls.
They are responsible for drafting and enforcing motor vehicle safety standards for all motor vehicles in the United States. They play a similar role as familiar government agencies like the Food and Drug Administration for food and drug safety and the Consumer Protection Safety Commission for consumer product safety standards.
What Are the Most Common Types of Vehicle Recalls?
Some of the most common defects with safety-related car recalls include but are not limited to the following:
- Defective wheels
- Leaking engines
- Car seat mechanisms
- Airbags that fail to deploy
- Stuck or broken gas pedals
- Defective engine cooling fans
- Faulty headlights and steering equipment
From time to time, no-to-low safety risk recalls may also be issued. These are usually related to smaller vehicle components like radios, air condition systems, body paint, and body panel issues.
In short, any defects that disrupt the safe operation of your vehicle qualify for auto recalls.
How Long Do Manufacturers Have to Address My Recall?
The recall process is pretty straightforward.
All manufacturers are responsible for managing recalls. Generally, they have up to 60 days from its Official Safety Recall Notice to send a direct notification to all affected customers informing them when a fix is available and how vehicle owners can arrange repairs. In addition, with recalls affecting millions of car owners, expect extensive media coverage by manufacturers across TV and print for up to several months.
Once recall notices are issued, affected drivers will set up an appointment at a dealership to fix the recalled part.
Note: Only some car manufacturers respond as quickly as one would like. For example, they’re responsible for informing and equipping dealerships with the necessary tools to perform repairs. Therefore, this education portion could take months after the first recall announcement.
How Do I Know if My Vehicle Is Part of a Recall?
Stay informed on your vehicle through the NHTSA’s free online tool. Enter your vehicle identification number (VIN) and pull up recall information. The NHTSA also issues email recall notifications on any make and model you subscribed to.
Another way is to refer to your vehicle’s CarFax report to see if it was part of any past recalls. They provide a detailed accounting of your vehicle’s history, including the number of past owners, accidents, and title history. If CarFax is a bit pricey for you, consider Autocheck. This direct Carfax competitor offers the same information at a slightly cheaper price point. It even has a proprietary scoring system that predicts how likely your vehicle will remain in service after five years based on the number of past owners, accidents, and other variables.
Note: Carfax reports have limitations. Not all accidents are reported, and not all owners and dealers fix all structural and mechanical issues.
I’ve Discovered a Possible Safety Defect That Is Not the Subject of a Recall. What Do I Do?
The NHTSA makes reporting a potential safety problem with any auto part, from tires to suspension systems, easy.
Allow the NHTSA to investigate possible defects by submitting a complaint online. Information you can expect to provide includes your vehicle identification number and any supporting documentation like a photo and video of the issue. You may also search for recalls on its website.
You may also call the NHTSA‘s Vehicle Safety Hotline at (888) 327-4236.
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