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State Farm takes on Ford
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January 21, 1998: 6:25 a.m. ET
Insurer sues Ford, supplier for alleged concealment of faulty ignition switch
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NEW YORK (CNNfn) - Faced with millions of dollars in insurance claims, State Farm Mutual Automobile Insurance Co. reportedly accused Ford Motor Co. and one of its suppliers of concealing the faulty ignition switches that led to the biggest auto recall in history.
The nation's leading auto insurer is taking on Ford and a unit of United Technologies Corp. in a lawsuit filed in U.S. District Court in Los Angeles, the Wall Street Journal reported on Wednesday.
State Farm is seeking compensation for its costs to repair or replace vehicles and additional money to repay consumers for their deductibles they had to pay, as well as other restitution. From 1988 to 1996, the estimated cost of the recall amounted to nearly $200 million, according to a State Farm official.
The alleged concealment focused on Ford and its supplier learning of the defect as early as fall of 1988. By 1991, the automaker had instituted an extensive redesign of the switch to reduce the risk of fires.
The 1996 recall affected 7.9 million vehicles. The suit alleged the recall constituted "only a fraction" of the 26 million Ford vehicles that contained the defective ignition switches.
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Ford
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