This paper proposes a new method for co-design of unknown input functional interval observer and fault tolerant control for LPV-switched systems with faults and unknown but bounded uncertainties. Accurate estimates are achieved by combining Input-to-State Stability (ISS) with multiple Lyapunov function. Unknown input functional interval observer reduces computation effort and eliminates the effects of disturbances while existence conditions don't need similarity transformation condition. The fault tolerant controller compensates the estimated fault and robustly tracks a chosen reference model. The method is successfully applied to vehicle lateral dynamics estimation and control. It shows its efficiency for estimating the lateral speed with a tight interval between the lower and the upper bounds. More generally, the proposed approach has a high potential for higher-order systems.