How Recalls Can Affect Your Auto Insurance

Whenever a car recall is announced one of the first questions our car owners have is how will it affect their Austin auto insurance. Will having a car with a defect affect their rates? Will it bring down the value of their car?


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These are legitimate concerns to have when a recall notice comes in the mail. On average there are approximately 200 car recalls a year that affects thousands of car owners. It’s best to be prepared by understanding how they affect your insurance now and in the future.

Will Recalls Affect My Insurance Rates?

A recall in and of itself shouldn’t affect your insurance rates. During Toyota’s massive ‘sticky accelerator’ recall in 2010 insurance companies across the country publicly reassured customers that the recall wouldn’t affect their insurance rates.

When recalls are made the manufacturer foots the bill, not the insurance company, and in the long run the repair should improve the car’s performance. That’s a good thing as far as your auto insurance rates go.

What if the Safety of the Car is Compromised?

Unlike recalls, the safety of a car is factored into your car insurance costs. If a recall has long-term affects on the safety of the car, even after being repaired, it could negatively impact your insurance rates. This isn’t typical, but is something that’s possible if a car ends up having multiple recalls and needs other repairs due to the recall issue.

What if the Value of My Vehicle Goes Down?

Value is also something that’s factored into the cost of insuring an automobile. If a recall is big enough, or gains enough negative attention, it could have a negative impact on the market value of the vehicle. While this is bad when it comes time to sell or trade-in, it may actually lower your monthly insurance premiums.

What If I Didn’t Buy My Car From the Maker or a Dealer?

If you purchased a car used from an individual you are still entitled to free repairs from the manufacturer. In fact, even if you buy used you can use the car’s VIN number to sign up for recall notices on the manufacturer’s website.

One thing to keep in mind is that car sellers of any kind don’t have to get recall repairs done prior to selling. So if you’re in the market for a new car do research first to find out if any recalls have been issued, then ask the seller for proof that the repairs have been made.

What if I Got Into an Accident Because of an Issue with the Car That Has Been Recalled?

If you get an accident because of a faulty part that has been recalled by the manufacturer then your insurance company can get the manufacturer to cover the costs. It was no fault of your own and they don’t have to pay for the repairs, therefore they don’t need to raise insurance rates to recoup the costs.

However, if you get a recall notice, fail to bring it in to get repaired and then get into an accident because of the recalled part there is a possibility that you will be held accountable. Err on the side of caution and always get the fix handled as soon as you receive the recall.

A recall isn’t an automatic car insurance increaser. However, you do need to be aware of how it could affect the safety and value of your car in the future, which will have some bearing on how much coverage costs.

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