General Motors says it will not use liability insurance payouts to compensate ignition-switch claims, reports Automotive News. David Roman, director of financial communications at GM, told the magazine that claims will be paid out “through cash on hand, no insurance.”
Attorney Kenneth Feinberg unveild GM's open-ended compensation fund last month to compensate those killed or injured in accidents caused by defective ignition switches. Under the fund, family members of the 13 people killed in accidents caused by the defective switch are eligible for at least $1 million–a number that can increase depending on other factors.
Automotive News reports Feinberg is solely responsible for setting the amount of compensation. According to Roman, Feinberg will have the final determination on numbers, and there is no cap on the amount.
While the move could potentially cost GM billions, analysts agree that it is the right one to make because it can help to repair the automaker's reputation.
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