WUOMFM

Claims jump "as expected" for GM ignition switch program

Feb 2, 2015

GM recalled 2.6 million Cobalts and other small cars last year for an ignition switch defect. The automaker admitted it had delayed the recall for ten years.
Credit Motor Trend

January 31 was the deadline to file a claim related to GM's ignition switch recall, and as the administrators of a special compensation fund expected, there was a last-minute surge in filed claims.

"We received probably since Friday close to 700 claims," says deputy fund administrator Camille Biros.  "That's typical for programs of this nature. You always start with a surge at the beginning, and then it levels off, and then right before the deadline you always have a large influx of claims coming into the program."

Biros' boss, Ken Feinberg, was in charge of several high-profile compensation programs, including the one for victims of 9/11, before he was hired by General Motors to administer its fund.

GM set up the fund so victims and families of victims could receive payments for injuries or deaths, without having to sue the automaker. GM admitted it delayed issuing the recall for ten years, and lawsuits could face an uncertain future, since the vehicles involved were all made prior to the automakers' 2009 bankruptcy.  Normally, a bankruptcy would shield a company from product defect claims.

Claimants must be able to show that the airbag in the affected vehicles did not deploy during an accident.  The recall affects Cobalts, Saturn Ions, HHRs and several other small cars with defective ignition switches that could turn the vehicle off while it was moving, disabling the airbags and other safety features.

Biros says so far, the fund has approved 51 claims for fatal accidents, and 8 for severe injuries, such as brain damage, paraplegia, or loss of limbs. 

Approved death claims are eligible for at least $1 million in compensation.

69 claims for less serious injuries which involved a hospital stay have also been approved.

Biros says it could take until sometime this spring to make determinations for the several thousand claims that remain to be reviewed.

The fund does not compensate owners who believe their vehicles lost value because of the defect. 

GM has not set a limit on the amount of money it will pay out under the program, but has said it expects to spend $400 million for claims.