Ford Kuga fires: Will your insurance pay out?

Following the recall of 4556 Ford Kuga 1.6L due to a coolant system error, a number of people have voiced concerns regarding their vehicles. Some Ford Kuga drivers are worried they will not get a good trade-in value on the vehicle due to the vehicles spontaneously combusting. There is also the question of whether or not insurance companies will pay out for such a claim.

Insurance claims

There seems to be little need for worrying about your insurer settling your claim if you are one of the unlucky Kuga drivers whose car combusted. Both OUTsurance and Hollard have stated that they see the fires as covered under their insurance policies.

Natasha Kawulesar, head of client relations at OUTsurance, admitted that the insurance company has received claims relating to the Ford Kuga fires and has settled all of them. “Clients are covered if a fire damages their vehicle and we will settle the claim ASAP. Should there be a manufacturing fault, OUTsurance will look to the manufacturer to recover the costs incurred.”

She added: “We advise clients to strictly follow the manufacturer’s instruction in terms of any safety recall.”

Marvin Tshezi, personal lines claims manager at Hollard, revealed that in the last 12 months the company has had two claims for incidents relating to fires where the insured vehicle was a Ford Kuga. “In the first case, relating to a 2013 Ford Kuga 1.6 EcoBoost Trend, the client opted to pursue a recovery directly against Ford.

“The second case, involving a 2014 Ford Kuga 1.6 Ecoboost Ambiente, is still under review, but our current view is that the fire is a peril covered by our policy. Should our investigation confirm this view, we will pay the claim and potentially institute recovery action against Ford should it be concluded that a manufacturer fault is to blame,” explained Tshezi.

According to Tshezi, the general view of Hollard is that fire is covered under the insurance policies, and as such, the insurer will settle valid claims with policyholders. They will, however, reserve the right in each case to recover any claimed amounts from the manufacturer, if a manufacturer defect resulted in the claim.

“While we have not yet reported anything to Ford, the client did so in the case of the first incident, and we will most certainly do so in terms of the second incident, if our investigation reveals a manufacturing defect as a contributing cause,” added Tshezi.

Vehicle trade-ins

Ford maintains that their cars are safe to drive. But whether drivers trade their vehicle in now or wait a few years, it’s not clear whether this defect will impact on trade in values.

Justmoney contacted several major car dealerships. However, some of them were unwilling to comment. The consensus seems to be, however, that the trade-in value of the vehicle will be determined by the individual dealerships. This, according to Matt Gennrich, general manager for group communications at Volkswagen, will be based on market and trade conditions.

Gennrich said: “Volkswagen SA manufactures and imports vehicles in South Africa. These vehicles in turn are then sold to an approved franchise dealer network who in turn interact and sell both new and used vehicles to customers as well as service them. While we do have a factory approved used car programme called Mastercars which specifies certain criteria in terms of age, service history etc. that qualify as Mastercars, we do not dictate which vehicles and at what prices dealers may trade cars in.”

According to Gennrich, Volkswagen SA is “aware of a number of customers who are considering replacing their Kuga’s with the new Tiguan.”

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