With the recall fiasco coming to an end, General Motors is looking forward to pay for claims emerging from its faulty ignition-switch crisis. Interestingly enough, the automaker will not utilize its liability insurance funds to help pay for the aforementioned claims, according to the latest reports.
The company will instead use an open-ended compensation fund to provide a claims-paying vehicle for individuals killed or injured in accidents caused by malfunctioning ignition switches. According to David Roman, GM’s director of financial communications, “it will be done through cash on hand, no insurance.”
Family members of those killed are eligible for at least $1 million, but alternative factors may increase the compensation. Individuals who have been injured in accidents caused by the defective ignition switches are also entitled for compensation. Estimates state the fund could cost the automaker billions of dollars, but would put the company in the proper direction to repair their reputation.