CommercialFleet

Minimising costs after an accident

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In the first part of our feature on accidents (page 49), we concentrated on preventing accidents from happening. But in part two, we are going to assume the worst and look at how we can reduce the inevitable costs that are going to be incurred, in terms of both money and  – often just as important in these days of ‘leaner labour resource’ – time.

According to the latest figures released by the Department for Transport in June 2016, there were more than 140,000 reported road accidents in 2015 (just under 400 per day). And that’s just the reported ones, with probably as many again not requiring bluelight services or both parties swapping insurance details and not reporting the accident.

What are the first steps?

Once the accident occurs, there are five key considerations to be taken into account which will determine the route taken by both parties involved in the accident, assuming both parties are insured.

  • Was it your fault or not?
  • Are you self-insured or not?
  • Was there a third party involved?
  • If there was, was anyone injured?
  • Do you have accident management provision as part of your insurance?

The above are just the start of the accident process, but the answers to the questions will have a fundamental impact on how the accident should be handled and, more importantly, your overall satisfaction with the result and cost.

The main areas for cost reduction are:

  • Report the accident to your office / accident management company as soon as possible. No matter who you talk to on this subject, it is pretty clear that speed of response is essential to reducing the overall cost of the accident. 

The FTA’s Mark Cartwright is one of them. “The speed of first notification of loss (FNOL) is key to managing costs – there are some very clever telematics kit around to assist with this,” he says.

This sentiment is echoed by Gabriel Bradley, from commercial vehicle accident management specialist Sopp+Sopp. “Getting the FNOL starts the ball rolling and the quicker this can be done the greater opportunity we have of reducing costs,” he says.

For instance, once the accident occurs there are significant operational issues to be addressed, all of which can have a major influence of the cost implications of the total bill over and above the more basic ones we mentioned earlier:

  • Are there goods on board?
  • Is there a spillage or contamination?
  • Is the vehicle driveable?

Keep things simple 

RAC director of pricing Phil Webb says: “It’s not all about ensuring you have, as much as possible within the company, one point of contact.” 

As one can imagine with a very complex accident, there are many interested parties, all demanding time and resources so the ability to maintain one person who has an overall view of the situation helps increase efficiencies providing they are not completely overloaded.

Have efficient and proactive software systems 

This is where a fast and effective software system may help in reducing costs, and certain fleet management and telematics software packages also include the ability to manage accidents through the system either as standard or as an add-on for a small fee, such as Trace Fleet Management, based in Coventry.

Have a breakdown and recovery solution

It’s an unfortunate fact of life that accidents rarely happen just around the corner but you can bet your bottom dollar they often happen at the most awkward of times and locations. So make sure you have access to or operate yourselves a 24/7 call centre which can log and coordinate the many stakeholders in the process.

Ascertain as soon as possible if the truck is driveable or the goods perishable. Ensure you have a high level of service level agreements (SLA) in place with your suppliers to ensure a fast response to the accident and that accurate and coordinated information is gathered and communicated to the central team. Of course in all of the above we are assuming you don’t have your own breakdown truck.

Have a replacement policy in place

If the vehicle or trailer is damaged to the extent it has to be recovered, have you already agreed replacement or rental provisions in place? Starting to look for a replacement three-axle 26-tonne fridge unit in the middle of the night in Devon will challenge the most proficient transport or distribution manager at the best of times. 

The job may be made a little easier if you have already agreed terms and prices with a supplier and, better still, if the service level agreements stipulate not only the response times but also the discount level on the rental tariff. The hire of a replacement truck or trailer is one of the most costly aspects of an accident (assuming no personal injuries are involved), so thinking one step ahead nearly always saves money in the long run.

Have a set of regional repairers on call

Once the decision has been made to recover the truck or trailer, the next step revolves around ‘where do we take it?’ 

The first decision is: decide whether you recover the vehicles back to your own premises or regional depot or take it to a local repair garage. Again the same philosophy is true – coming to an agreement before a situation arises is a lot cheaper than trying to sort and negotiate after the event has happened. Recovery costs are naturally high so reducing the travel time and mileage for the recovery agent is a key target. Analyse your volume routes and, if you are like many other operators, you’ll find the ‘80/20 rule’ applies: 80% of your traffic will be through the key 20% of your routes, so having a local repair garage on hand that’s within a 10-20-mile radius of those key trucking routes will help cut down on any recovery costs.

And what happens when recovery is not available? Do you have access to secured storage on-hand, again on a regional basis? As we all know secured storage is a lucrative business, so if the unit has to be recovered there, keeping the use of a facility like this to a minimum is crucial and relocating the damaged truck to either your location or to the authorised repairer should be achieved as soon as possible.

Have a telematics system

There are many advantages to the use of telematics, as we discussed in part one. In the area of reducing accident costs, if telematics are linked to an onboard dash cam (or even if the dash cam is standalone) then the cost reduction could go as high as 100%. 

By having a dash cam in the cab and, in instances where a third party has a contrary view of the incident from your driver – basically when it boils down to one person’s word against another, with no witnesses – then in many cases you potentially could be looking at a 50/50 shared responsibility. Here, a dash cam could be the vital piece of evidence you need to win the claim.

Use an accident management company

As can be seen from the above, not all accidents are equal. And it certainly appears to be the case that, the more complex the accident, the greater potential for cost reduction through an accident management company is. So, who uses accident management companies?

According to Sopp+Sopp’s Bradley, who handles around 2,500 claims per month, the client base of customers using accident management companies is spread widely across the road transport industry. “But there’s a definite bias toward the larger fleet customers,” he says. 

However, Sopp+Sopp is seeing more and more approaches from smaller fleets looking to take advantage of using accident management companies for their services whether they are self-insured or not.

Summary

Regardless of fleet size, it’s a fact of life that accidents will happen, but there are plenty of ways to reduce cost and time – it all depends in which of the three alternatives you choose: handle the claim yourself, go through the insurance company or bring in an accident management company.

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