Insurance Firms Sue Dealership and Honda Over Suspected Service Snafu

A trio of insurance companies are suing a New York dealership and the American Honda Motor Company after over a million dollars in property damages were paid to a local homeowners association and the owners of a vehicle that caught fire while parked in their garage. Insurers are claiming that the fire was the result of botched maintenance and negligent vehicle design and are looking to recoup payments.

While the fire itself took place in 2021, the insurance firms didn’t formally refute the claims until last month. Based on reporting from Insurance Journal, the residents’ 2018 Honda Pilot had been serviced on the same day as the garage fire. The vehicle was taken in for a fluids change (oil and transmission) and went up in flames just hours later. The insurers have alleged that Honda and its Middletown dealership are ultimately responsible for the incident and liable for damages due to negligent service and design.

From Insurance Journal:

The subrogation action has been brought by Country Mutual Insurance Co., which provided property coverage to Woodside Knolls Homeowners Association that included the Skyers’ property, and two Allstate units that provided property and auto insurance to the Skyers.

The insureds made and were paid claims totaling more than $1million under all three policies. The insurers seek to regain that amount they paid out plus legal costs, attorney fees, delay damages, prejudgment interest, and other relief the court deems appropriate.

The insurers assert negligence and strict liability claims against the car maker and its dealer including for failing to “properly and competently inspect, diagnose, service and maintain the subject vehicle, including components associated with the inspection and servicing of the transmission fluid and oil-and- filter change, in a safe and appropriate manner.”

The complaint stipulates that the vehicle was returned to the owners in an “unreasonably dangerous and defective condition, which catastrophically failed due to a defect in and/or malfunction.” It likewise claims that the relevant employees were under-trained and used improper materials and techniques. However, it does not explain what these conditions entailed or how they resulted in the residential fire.

Still, the suit is trying to peg the automaker and service center as responsible for the incident and in breach of warranty.

Plaintiff Country Mutual Insurance Co. is the property insurer of the Woodside Knolls Homeowners Association, and has joined forces with Allstate Fire and Casualty and Allstate Indemnity, to recoup payouts made on home and automotive damages totaling over a million dollars. The suit hinges on the grounds that a third party (Honda and the dealership) were responsible for the damages and thereby liable for recompense. Whether or not that ends up being the case will depend on how the court case progresses.

[Image: Honda]

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