November 3rd, 2014
Car recalls are becoming increasingly common throughout the automotive industry, as updated safety standards and advanced technology make it easier to detect potential driving troubles before they become widespread. In fact, the National Highway Traffic Safety Administration noted that on October 24, there were five recalls from separate manufacturers. Additionally, many recalls can affect hundreds of thousands of drivers at once, which brings into question their impact on auto insurance.
While many drivers may fear a rate hike if their vehicles are part of a recall, the opposite can actually be true. Recalls occur at the manufacturer's expense, which means any problems with your car will be handled by the maker. Common problems with cars begin with the engine, brake pads or malfunctioning safety equipment - all of which will be repaired or replaced at no expense to you or your insurance company.
Because your provider isn't hit with a claim to fix your vehicle, you pose no revised risk, which means your monthly premiums should remain the same. However, if your car becomes devalued as a result of the recall, then the amount of insurance required to cover your car should decline, which may lead to lower rates.
Further, if the problem is settled, then your car could actually be deemed safer than it previously was. In this case, safer cars mean cheaper insurance. The opposite is true if your car's troubles aren't handled.
You may opt to ignore the recall notice and continue driving as normal. Not only can this be at the detriment of your personal safety, but also your insurance company will likely find out. If there is a serious defect with your vehicle, then you will be at a higher risk of an accident, which will, in turn, lead to higher insurance rates, according to U.S. News & World Report.
To ensure that your car is up to date on all safety regulations, check with your local dealer. For all insurance needs, contact CoverHound.