Insurers deny Daewoo coverage
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Insurers deny Daewoo coverage
sad.gif Automotive news
10/28/02
Daewoo's nightmare is getting even scarier as Halloween approaches: Some insurance companies are refusing to write policies on vehicles built by the beleaguered Korean automaker.
That means Daewoo buyers face higher rates from companies still offering collision coverage, and dealers will have an even tougher time selling the troubled brand.
Because insurers are required in most states to provide compulsory liability and personal-injury coverage, Daewoo owners still will be able to register their cars. But collision coverage will be harder to find, cost more and in many cases come with huge deductibles.
Several major carriers have declined to write collision policies on Daewoo cars because the scarcity of replacement parts makes damaged vehicles irreparable and a high risk for insurance providers, according to the Insurance Information Institute.
"Some companies aren't writing new coverage for Daewoos, and some are adjusting their rates accordingly" to factor in the higher risk, said Loretta Worters, spokeswoman for the trade group, which represents 350 of the nation's auto insurance providers. "Getting sheet-metal parts is a big issue."
Spokesmen for insurance giants Allstate and State Farm - which as the country's two largest carriers wrote a combined 28.6 percent of new auto policies in 2001 - said they still are covering Daewoo vehicles but are raising their rates.
Others, including Boston-based Liberty Mutual, the eighth-largest auto insurance carrier in the United States in 2001, say the risk of covering Daewoos is too high.
"We're not writing coverage on Daewoos for new customers," said Glenn Greenburg, a Liberty Mutual spokesman. "It's an industrywide issue, not specific to Liberty Mutual."
Daewoo Motor America Inc. is hoping the deal made Oct. 17 between its parent company and General Motors will ease the parts shortage central to the problem. GM and two of its partners, along with creditors of the bankrupt Daewoo Motor Co., have formed a company to take over Daewoo's manufacturing assets and selected sales networks in Europe.
The company, GM-Daewoo Auto Technologies, is expected to name a management team this week and will be responsible for supplier relations and the parts flow to U.S. dealers.
10/28/02
Daewoo's nightmare is getting even scarier as Halloween approaches: Some insurance companies are refusing to write policies on vehicles built by the beleaguered Korean automaker.
That means Daewoo buyers face higher rates from companies still offering collision coverage, and dealers will have an even tougher time selling the troubled brand.
Because insurers are required in most states to provide compulsory liability and personal-injury coverage, Daewoo owners still will be able to register their cars. But collision coverage will be harder to find, cost more and in many cases come with huge deductibles.
Several major carriers have declined to write collision policies on Daewoo cars because the scarcity of replacement parts makes damaged vehicles irreparable and a high risk for insurance providers, according to the Insurance Information Institute.
"Some companies aren't writing new coverage for Daewoos, and some are adjusting their rates accordingly" to factor in the higher risk, said Loretta Worters, spokeswoman for the trade group, which represents 350 of the nation's auto insurance providers. "Getting sheet-metal parts is a big issue."
Spokesmen for insurance giants Allstate and State Farm - which as the country's two largest carriers wrote a combined 28.6 percent of new auto policies in 2001 - said they still are covering Daewoo vehicles but are raising their rates.
Others, including Boston-based Liberty Mutual, the eighth-largest auto insurance carrier in the United States in 2001, say the risk of covering Daewoos is too high.
"We're not writing coverage on Daewoos for new customers," said Glenn Greenburg, a Liberty Mutual spokesman. "It's an industrywide issue, not specific to Liberty Mutual."
Daewoo Motor America Inc. is hoping the deal made Oct. 17 between its parent company and General Motors will ease the parts shortage central to the problem. GM and two of its partners, along with creditors of the bankrupt Daewoo Motor Co., have formed a company to take over Daewoo's manufacturing assets and selected sales networks in Europe.
The company, GM-Daewoo Auto Technologies, is expected to name a management team this week and will be responsible for supplier relations and the parts flow to U.S. dealers.
