“Kuga owners said they were turned away when they tried to trade in their cars for other Ford models, with dealers either refusing or reluctant to give owners trade-in values,” the newspaper said.
It also mentioned that Ford South Africa only ordered a recall after 39 Kugas had combusted when there was a recall in the US after 11 cars had caught alight.
Ford South Africa CEO Jeff Nemeth told the newspaper: “We can only act on the data that we have.” On whether Ford should have responded more quickly, Nemeth said: “In hindsight, yes, it seems like we should have acted quicker.”
The question inevitably arises around insurance of these doomed vehicles.
Thousands of Ford Kuga owners around the country have to return their vehicles to the manufacturer after Ford SA CEO Jeffery Nemeth announced a safety recall on over 4 500 1.6l EcoBoost Ford Kugas built between 2012 and 2014. What are the insurance implications for these owners?
Carolyn Thompson, head of Personal Lines at Mutual & Federal, says that most standard car insurance policies exclude mechanical, electrical and electronic failure or breakdown.
“There might be some cases where the reason for a fire is difficult to prove and the insurer would likely pay out. Where the customer has taken out cover specific to electrical and mechanical breakdown, they would be able to claim for losses or damage as a result of these failures,” she says. However, Thompson warns that, should there be an increasing number of vehicles on the roads with similar issues, it will result in more claims which could make it necessary to increase premiums on this type of insurance.
Another unwelcome implication for Ford Kuga owners is that the value of these cars is likely to have dropped significantly, due to the recall. This means that selling a Ford Kuga in the near future is unlikely to be a profitable experience.
The recall follows several incidents where as many as 48 Ford Kugas caught alight due to overheating, which it has now been revealed is due to a manufacturing fault. The issue gained significant traction after awareness was raised by the family of Jimmy Reshall, who died when his Ford Kuga caught fire and the company now faces a class action lawsuit. Thompson observes that it is not clear yet how Ford will choose to assist or reimburse the affected consumers. “Affected consumers should ensure that they notify their insurer immediately if they are using a different vehicle or a courtesy car,” she says.
Mutual & Federal has not yet experienced any relating fire claims. This might be due to the fact that these faults are generally not covered by insurance policies, as the liability falls with the manufacturer.
Thompson notes that in cases where insurers have assisted customers by paying claims on vehicles that have significant flaws, these insurers may try to recover their losses from the vehicle manufacturer. “However, it’s good that Ford has admitted their error and can now assist in making the roads safer going forward,” she says.