What do insurers think about defective products?
Insurers have access to a gigantic database of claims information maintained by the Insurance Services Office (ISO). That database can reveal patterns of problems with countless products from car parts to home appliances to sprinkler systems. Insurers provide government agencies with information about claims that might have been caused by defective products.
State Farm insurance has a staff dedicated to tracking claims. State Farm does not provide the specific information about each claim, such as the claimant’s name, the claim number or the vehicle Identification Number. NHTSA uses State Farm’s research in conjunction with the more specific complaints its defects division receives.
NHTSA is the government agency but not the only one that taps the insurance industry for information on potential product defects. CPSC, the consumer products safety commission, also uses data gleaned from insurance company claims databases to aid its investigations.
Insurers try to look for help support for their subrogation efforts against the manufacturer of a defective product. When an insurance company subrogates, it seeks reimbursement from a party it deems responsible for a customer loss it had to pay. If a government safety organization issues a recall of a product that failed to work or caused an accident in which the insurer paid a claim, the insurer can use the government recall as leverage in its collection efforts.
The reason why insurers don not issue public bulletins when they discover a pattern of problems is because they do not want to cause a public panic by announcing they have uncovered two dozen claims over four years that have the same cause. Despite the amount of data insurers collect, they are not required by law to report problems to government agencies, and there is no formal information-sharing agreement between NHTSA, CPSC, and insurance companies.
Anyone who has suffered an injury caused by a dangerous or defective product knows that it can be a traumatic experience. Whether the injury was caused by a design defect, improper instruction as to use, or a defect that occurred during manufacturing, you have the right to take legal action against any person, company, or entity that is responsible; including private citizens, stores, manufacturers, insurance companies, large corporations, and government agencies.
After any situation involving a dangerous product, you should speak with an experienced attorney who will evaluate your case with you to ensure that your legal rights are fully assessed and protected.
A product liability lawyer will gather evidence substantial enough to show that the product was indeed defective and present evidence in court.