Auto Recall Notices and Your Car Insurance


airbag recalls

To date, more than 10 million GM, Honda, Toyota and Nissan vehicles have been recalled because of airbags with the potential to explode and send shrapnel-like material spewing throughout the passenger cabin. The airbags, made since 2000 by the Takata Corporation, have been linked to four deaths so far.[1] Not all recalls are as dramatic as this one, but neither should they be ignored. Here’s what you need to know and do if you get a recall notice.

Way Beyond the Lemon

According to’s definition, your car is a lemon if three or four attempts to fix it fail or if it is in the shop more than 30 days in a 12-month period to fix one or more substantial warranty defects. But, if the manufacturer or the National Highway Traffic Safety Administration (NHTSA) starts getting complaints from lots of consumers about the same kind of defect in the same type of vehicle, it can trigger a recall.

At that point federal law requires that the auto manufacturer send recall notices to the people who bought that car telling them what to do to get the problem fixed. Their responsibility to inform you pretty much ends there.  If you’ve moved or sold the car, unless the recall is major news like the Takata airbags, you may not get the message. That’s why it’s not a bad idea to routinely check your manufacturer’s website or the NHTSA’s for any recall notices. If you bought the car second-hand, you definitely should do this. In fact, it should be standard procedure before  you buy a used car. According to, 3.5 million used cars with unfixed recalls were sold on websites in 2013.

By the way, if you buy a used car from a private party or a dealer, you are still entitled to any recall repairs. To make sure you get any notices, just go to the manufacturer’s website and register your car’s 17-digit VIN.

What the Notice Will Tell You

Recall notices typically describe the defect and its potential risks. They’ll also let you know where you can take it to have it repaired, what the repair will involve and how long the repair will take. If the car shouldn’t be driven at all (as was the case with a steering defect in the 2014 Chevy Silverado, 2014 Chevy Tahoe and 2014 GMC Sierra)[2], you’ll be instructed to arrange towing with the nearest dealership at no cost to you.

If it’s a really bad defect, the manufacturer may offer a replacement vehicle or refund your purchase price. Or they may offer you a cash allowance toward the purchase or lease of a new vehicle, as GM did earlier this year when 1.37 million of their older model small cars were recalled because of a faulty ignition switch.[3]

Next Steps

When you get a recall, act on it. For one thing, your safety and that of your passengers or even other drivers could be at risk if you don’t get the defect fixed. For another, getting it fixed won’t cost you a penny. The manufacturer foots the bill and in some cases may even provide a loaner car gratis, so other than the time spent to drive to the dealership, you aren’t really inconvenienced.

Does a Recall Have Any Impact on Your Car Insurance?

If you attend to the recall and have the defect fixed promptly, there shouldn’t be any impact on your car insurance. However, according to analyst writer Neda Jafarzadeh, “To be on the safe side…you may want to provide your car insurer with paperwork documenting that the necessary vehicle repairs have been made.”[4] She warns, however, that if you ignore a recall notice, your premiums could go up, noting that if you get in an accident caused by a faulty pair you failed to fix, your car’s safety rating will be affected, which could result in a rate bump.

Need car insurance for a new vehicle or just want to shop for better rates? You can do that here.

[1] Yoko Kubota, “Takata’s Air-Bag Recall Costs Rise,” Wall Street Journal, 11.7.14


[3] “GM offering $500 rebates on new cars to replace recalled models,”

[4] Neda Jafarzadeh, “How an Auto Recall Affects Your Car Insurance,”

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