General Motors Company (NYSE:GM)’s Ignition Switch Woes Compensation Claims Climbs More Than 50% Within A Week

Albany, New York (09/23/2014) – The biggest automobile company in the U.S., General Motors Company (NYSE:GM) has witnessed an unfamiliar situation of recording significant jump in compensation claims within a week’s time as a result of the recall of vehicles due to ignition switch problem that claimed more than 20 lives. The higher percentage of claims can be attributed to the number of lawyers filing claims on behalf of their clients.

Compensation Claims Increase

The defective ignition switches has affected more number of people and the compensation claims have climbed 52% to 675 claims at the end of September 19 from 445 claims in the preceding week of September 12, Forbes reported quoting the company’s restitution fund head, Kenneth Feinberg.

While death claims increased to 21 from 19 in a week’s period, the overall increase in compensation claims was due to a big jump of 66.3% in injury claims to 532 during the week ended September 19 from 320 claims in the previous week. This included 467 hospitalizations and 65 serious injury cases.

Spurt In Claims

The fund’s Deputy Administrator, Camille Biros, said that so far Feinberg has given his approval only to 16 injury claims and denied 25 claims. Though the number of claims surged, the official indicated that there was no need for all the claims to be eligible for compensation by pointing out the denial of Feinberg.

The head of the restitution fund has received 143 death claims since he started accepting claims on August 1. While the death toll reached 21 last week, General Motors Company (NYSE:GM) has indicated earlier that 13 deaths were associated with the faulty ignition switches.

The fund has promised to a minimum of $1 million to the family for every death claim validated by the Judge while compensation for hospitalized victims ranged between $20,000 and $500,000. Significantly, the compensation claims for catastrophic injuries would cover lifetime care cost.

Restitution Fund

General Motors Company (NYSE:GM) has established $400 - $600 million towards restitution fund. However, the company has not set any limit on the total compensation to be paid but indicated that it would abide the decision of Feinberg. The head of the restitution fund said recently that it would take 4 – 6 weeks to get a fair idea of the potential cost to the company. General Motors Company (NYSE:GM) has to file the details before December 31.

About the Author

Terrel is US Markets Daily's business news reporter. She joined US Markets Daily after five years as a print reporter.

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