By Sven Hugo
Ford South Africa has issued a safety recall for all 1.6-litre Ford Kuga models in South Africa made between December 2012 and February 2014, which also has insurance implications for the manufacturer and not necessarily the vehicle owner.
From an insurance perspective, the client is covered, but in a case such as this, the insurer would seek recourse from the vehicle manufacturer. “We would pay a claim should the vehicle burst into flames, as it would be covered under the comprehensive motor cover,” says Martin Grove, head of Commercial Insurance at Bidvest Insurance Group, but adds that “if after investigation it was found that the cause of the fire was due to a manufacturer fault or defect, then we would seek recourse from the manufacturer, but in our eyes getting the customer safely back on the road is our priority”.
Head of Personal Lines at Mutual & Federal Carolyn Thompson echoes Grove, saying that where insurers have paid out for claims on vehicles that have significant flaws in them, they may try to recover their losses from the vehicle manufacturer. However, she says on most personal lines motor insurance policies mechanical, electrical and electronic failure or breakdown is excluded. There might be some cases where the reason for a fire is difficult to prove and the insurer may need to pay out.
Other insurers also say they will take further action against Ford to recover costs. “Should we settle any of these claims, we’ll definitely take legal action against Ford to recover the costs for replacing clients’ vehicles or repairing damages,” says Wynand van Vuuren, King Price head of Legal and Claims. He also urges owners of problematic Ford Kugas that are not insured to approach the motor ombudsman for assistance.
Hollard has experienced two such claims recently, both related to the Kuga. “The one claim was withdrawn as the insured took it up directly with Ford and the other claim is still being investigated and if found that the fire was due to defective design we will pursue the matter on behalf of the client with Ford SA,” says Arie De Ridder, national head of claims, commercial and personal lines.
The main thing that brokers can do is encourage clients to have their cars checked says Discovery Insure.
“In the recent recall of the 2012 to 2014 models of the Ford Kuga, we request our clients to have their vehicles checked by Ford and we will also be in touch with these clients to remind them of this request from Ford, and to get confirmation that their vehicles have been quality checked,” says Francois Theron, chief operating officer for Discovery Insure.
At a press briefing, when Ford SA CEO Jeff Nemeth was challenged as to why insurers should be held liable for the cost of an alleged manufacturers fault, he said the company will work with customers and insurers on a case by case basis.
The carmaker said yesterday that a total of 4 556 vehicles in South Africa were affected by an issue with the engine overheating, which can lead to fire.
“Surely Ford should have monitored the number of incidents, why have they waited this long?”
“We have investigated the incidents as they have been reported to us, removing many parts for detailed examination in our engineering facilities in Europe and North America. The data collected from the recent incidents and the maintenance checks we are conducting through our dealers have helped us to determine the root cause of the fires,” the company said yesterday.
The fires are caused by a lack of coolant circulation, which can lead to a cracking in the cylinder head and eventually cause an oil leak. If the leaking oil reaches a hot engine surface, it can potentially catch fire. “We are not aware of any injuries resulting from the engine compartment fires,” said Ford, amidst remaining uncertainty about the death of South African Reshall Jemmy who perished inside his burning Ford Kuga in December 2015. Ford insists this incident was isolated and not related to the current one.
Drivers of Kugas are urged to take affected vehicles to the nearest Ford dealership as soon as possible – the safety recall comprises two stages. The first stage involves replacing affected components on the cooling system, verifying and updating the software and conducting an oil leak check on the cylinder head.
“If any Kuga 1.6 owner sees any indication that the engine may be overheating or experiences warnings on the instrument cluster, they should pull over as soon as it is safe to do so, switch off the engine and ensure all occupants are safely out of the vehicle. For safety reasons, the bonnet must not be opened,” explains Ford. “The emergency services should be called first, if required, then Ford’s Roadside Assistance on 0861 150 250. Supported through the AA, this service is available 24/7.” Should customers experience delays in repair the company will issue a courtesy car until the vehicle is repaired. “Clients should ensure that if their vehicle has changed or if they’re driving a courtesy car, they have made these updates with their insurer,” says Thompson.
Many consumers and experts are questioning Ford’s lax approach to this issue that spans years. “Organisational vulnerabilities and crises need to be identified while they are still small and manageable; surely Ford should have monitored the number of incidents, why have they waited this long?” reputation consultant Deon Binneman asks.
A valid question, as Ford only recalled these vehicles after increased pressure from the National Consumer Commission to do so.
For now, says Van Vuuren of King Price, the most important thing is to ensure that all affected cars are returned to Ford.