Accident management: The clock is ticking

Here’s a typical scenario: A driver reverses into another vehicle, makes a note of the other vehicle’s registration number, but fails to get the third party’s phone number. A day later, he contacts the fleet department with the details.

The fleet manager has no way of contacting the third party, leaving them at the mercy of a credit hire company. All they can do is wait.

Two months later, they are hit with a bill for £4,000.

Had the driver contacted the fleet manager immediately and recorded all the necessary information, it could have been a different story.

But what the driver does at the scene of an accident isn’t the only part of the accident management process where acting quickly can minimise costs.

Making sure the repairer assesses the damage and carries out the repair in an acceptable timeframe is key.

For van fleets relying on engineers out on the road each day, reducing a vehicle’s downtime by a day could outweigh the cost of the repair.

Some fleet managers choose to handle the accident management process themselves, but others turn to specialist providers – either through their leasing company or directly with an accident management company.

The provider will usually handle the entire process, from the driver’s initial call through to the claim being finalised and the vehicle being back on the road.

However, some providers will let fleet managers pick and choose what services they want.

It’s even possible to include telematics in the traditional accident management service.

Turn the page to see the process an accident management company goes through, followed by a detailed look at how to reduce the cost of accidents and whether an in-house or outsourced approach is right for your fleet.

Stage one: recording the incident

Fast accurate reporting can save you time and money

Fleet managers need to have policies in place about how quickly an accident must be reported and how a driver goes about reporting it.

This should be covered as part of an employee’s induction and be included in the driver handbook.

Ideally, drivers should notify the fleet department, or accident management provider if the process is outsourced, at the scene of the accident or as soon afterwards as is safe.

If a company has a number of leasing providers, it may be useful to outsource to an accident management company so a driver has one number to call.

“Accident management providers will employ service centre agents who are trained to deal with distressed drivers,” says Jim Monteith, head of accident services at RAC.

“They can spend the right amount of time on the phone with each driver to accurately capture incident detail, assess liability, and to understand potential indemnity restrictions, whilst providing re-assurances following nasty accidents.”

BT Fleet has a helpline and an online system for reporting incidents.

If it is a major incident, a driver can phone the helpline to provide basic details and give full details later.

The online system takes drivers through a series of questions and allows them to upload images.

Drivers should be trained to discreetly photograph the collision scene, according to Dr Will Murray, research director at Interactive Driving Systems.

This includes road markings, damage to all vehicles, the third party driver if they seem suspicious, number plates, the positioning of the vehicles, tyre/skid marks and signposts.

“Pictures stop extra large and excessive third-party claims and allow claims to be processed quicker and more accurately, which cuts down on hire charges for vehicle downtimes,” says Dr Murray.

The details to record on the phone might include how many hours they had been driving, when they last had a break, the weather conditions and whether there were any witnesses.

It is useful to provide drivers with an ‘at scene bump card’, which should be kept in the vehicles.

Visit http://bit.ly/fn-accidentmgt for a copy of Interactive Driving Systems’ ‘bump card’.

Is the vehicle still driveable?

Ben Creswick, business development director at FMG, says establishing if the vehicle is still driveable is “vital from a safety point of view and can help to minimise vehicle off-the-road time, as we can pre-order parts and fit them at a more convenient time for the customer”.

Telematics can be used to speed up the accident management process by establishing the circumstances of an accident, such as the vehicle’s speed at the time of the crash.

Tim Eaves, commercial director at Accident Exchange, says the forensic accident reporting tool on its telematics system (In-Car Cleverness) provides accurate reconstruction of incidents, which in turn reduces liability disputes.

RAC’s telematics device even has in-built crash detection capabilities and will notify RAC in the event of a collision. The service centre will then make contract with the driver.

Companies will need to set a policy on collision investigation. Ideally, an interview should be carried out between the driver and their line manager within 24 hours of the incident.

However, fleets need to think carefully about whether to introduce a policy that penalises drivers for at-fault accidents.

RAC’s Monteith says: “Many fleets fall foul of introducing large penalties for at-fault drivers, which can often discourage the driver from reporting the incident.

This problem really hits home on incidents that involve a third party, who will be claiming against our client.”

Stage two: Managing the third party

Controlling claims can halve your costs

Recording detailed information at the scene can help the accident management company or insurer to determine who is at fault.

This will help mitigate potentially expensive third-party claim costs.

RAC’s research shows the costs associated with a controlled third-party claim are about £1,800 versus about £4,000 for a non-controlled claim.

Many drivers make the mistake of only considering the cost of repairing their own vehicle and not the vehicle they have hit, according to Chris Ryder, UK sales manager at the National Accident Repair Group.

“In the ambulance-chasing world we are in, there are a number of parties who will find the third party’s details through solicitors or otherwise and within 30 minutes of that accident being reported to the insurers be on the phone to  third party.

“They’ll say, ‘Talk to us, you can sue for this, we will repair the vehicle for you, we can give you a courtesy car three grades better than the one you’re driving. You can have it for months’. They make money every time.”

An accident management company should handle third party capture – before a credit hire company contacts the third party.

“In a short space of time, they will be on the phone to that third party, getting them a courtesy car at a sensible grade, making sure their repairer is used and handling contact with the insurer,” Ryder says.

“They will be looking at it from a fleet operator’s perspective. It’s about keeping the third party happy and getting them back on the road for minimal cost.”

Stage three: The repair process

Keep off-the-road times and parts and labour costs under control

How long a repair takes and the cost of parts and labour are key factors in the overall cost of a claim.

Carla Kersey, manager of operations – accident and risk at ARI Fleet, says: “The greatest savings can be made by efficiently managing the process and ensuring the vehicle is off the road for the lowest number of days possible.”

When choosing an accident management provider or repairer, it’s important to find out their average off-the-road time. But don’t necessarily take it at face value.

Shaun Rowley, senior product marketing manager at BT Fleet, says: “Be careful of companies that say their average off-the-road time is two days.

"That might be because 70% of their work is dent repair, which is done in an hour and their other repairs take seven days.”

Service level agreements (SLAs)/key performance indicators (KPIs) should be set for vehicle off-the-road time and whether the repairer exceeds the estimate completion date.

One SLA BT Fleet sets is that once the vehicle is on site, the repairer has two hours to do the estimate. An accident management company should chase and help speed up the repair process.

BT Fleet has a team of ‘chase controllers’ to make sure the vehicle will be completed on time.

Making sure the bodyshop has the capabilities to carry out the repair – particularly with vans or specialist equipment – can save on downtime.

“A repairer might claim to do commercial vehicle but in reality they can only do car-derived vans and short wheel base vans because the booth where they paint the vehicles isn’t big enough for a Mercedes-Benz Sprinter,” says National Accident Repair Group’s Chris Ryder.

Also be wary of repairers that quote very cheap labour rates, he says.

“They might be cheaper than another repairer but how long do they actually take to do the repair?”

There are standard systems in the repair industry that will generate average repair times for different types of repair so check that the garage uses these.

Accident management providers and repair networks argue that by going to them rather than direct to a repairer, a fleet operator can secure cheaper rates due to the volume of work they will put through their network.

ARI Fleet’s Kersey says: “A company can benefit from working with a fleet management company that buys services and automotive parts ‘in bulk’ and passes these savings on to the client.

"For example, our labour rates and costs for automotive parts are lower because we use selected suppliers regularly and secure better costs.”

Stage four: Analysing the data

Identify risk areas and prevent accidents in the first place

Fleet managers should analyse whether certain cost centres, depots or drivers are repeatedly having accidents, the types of accidents that are happening and at what time of day, month, and year they occur.

They can then identify if further training is required, assuming the company already has a risk management programme that includes driver training.

FMG’s Ben Creswick, says: “The best way to ensure a cost-effective vehicle solution is by looking at the causes of incidents within a business, and taking measures to help mitigate them.

“Prevention is better than cure for a whole host of reasons, not least, cost.”

Case study: EDP Energy

Fleet manager: Kevin Boxall
Fleet size: 1,800
Accident management: Outsourced

EDF Energy outsources accident management for own damage to its maintenance administration provider.

“We outsource accident management because, as a small internal fleet team, we are able to buy into the greater expertise and extensive repair network of the outsourced provider,” says Kevin Boxall, fleet manager at EDF Energy.

“It sits within a broader scope of outsourced fleet management services with the same provider, enabling better synergies and resulting in improved cost efficiency and vehicle availability.”

Setting the right threshold for authorising jobs is crucial. If set too low, the fleet team will be contacted too frequently.
This means “you’re acting as the accident management provider yourself”, says Boxall.

It can also delay the start of a job because the garage is waiting for authorisation.

Boxall has caveats in place around authorisation.

“If the provider doesn’t receive authorisation from us within a certain time period then, up to another level of value, they can go ahead with the repair,” he says.

Vehicle downtime is monitored carefully. EDF Energy has an average downtime KPI with its provider and it must demonstrate it has chased the repairer.

“If downtime isn’t managed properly, you pick up the indirect cost of hire,” Boxall says.

“If it’s a significant repair it could be a significant hire period. There’s a temptation to maintain spare vehicles and they have a cost.

“It’s a question of confidence in the provider – you have to trust that they will manage the repair from start to finish in an appropriate period of time.”

Case study: Kelly Fleet Services

Fleet claims/risk manager: Clare Cain
Fleet size: 1,732
Accident management: In-house

Kelly Fleet Services has had only one third-party claim in the past four-and-a- half months thanks to its in-house accident management team.

Getting drivers to contact the team while still at the scene is crucial, according to Clare Cain, fleet claims/risk manager at Kelly Fleet Services.

The drivers call a 24-hour accident line and give details that enable the team to establish liability.

The team also records the make, model and registration of the third party’s car and the number of people in the other vehicle.

The driver will take pictures of their vehicle, the other vehicle and the location.

If a driver is medically injured and unable to call the accident line, a manager is sent to the scene.

The team will even speak to the third party at the scene.

If the third party declines to speak to them, Kelly Fleet Services’ driver gives them a card with the team’s contact details.

The team also sends an “intervention” text message, offering to repair the vehicle at one of Kelly Fleet Services’ approved repairers in the area and to provide a hire car at no cost.

The third party is advised that they don’t have to use Kelly Fleet Services, but if they don’t, Kelly Fleet Services will not pay above a set rate for a hire car.

“We deal with the third party in a sympathetic way,” Cain says.

“When we used a company to help with the accident line, we had a third party saying that they found them aggressive and they felt intimidated.

"By managing the process in-house we can ensure that every claim is managed in the same fashion.”

When Cain used an external company, she found it didn’t give the same attention to detail as the in-house team.

“They didn’t always get the third party registration or the correct telephone number,” she says.

“I would phone the company to see what was happening with a claim and they would have to come back to me later. But I wanted the information straight away.”

Fraud is also an issue as the vehicles are branded and people know the vehicle is insured.

“By managing it in-house, we can pick up on fraud claims quickly,” Cain says.

On average, Kelly Fleet Services has four or five fraudulent claims a year.

“We had a case where we hit a vehicle in the rear and the third party declined to use our services,” Cain says.

“He wanted to use his garage, which charged £47 an hour.

The insurance company might have let that go, but we rang them and said we couldn’t sustain those rates. It turned out the driver had front-end damage from an accident the week before, as well as our rear-end damage.

He was trying to get the whole car repaired. Fraud does happen.”

Case study: University of Warwick

Transport manager: Graham Hine
Fleet size: 139
Accident management: In-house

The University of Warwick’s claims rate has almost halved (from 31 to 18) since 2008, when transport manager Graham Hine began overseeing the process.

As a result, its annual insurance premium fell 15% in 2009/10 and 20% in 2010/11.

The university has a separate insurance department that processes the claim, but Hine is responsible for managing the vehicle repair and the driver.

Drivers report accidents to their line managers and if it involves a third party they are taken off driving duties immediately.

The driver is interviewed by their line manager within 24 hours and the incident report form is sent to Hine to consider the circumstances and the liability and whether further action is required.

If the vehicle is driveable, it is taken away to be examined by the university’s repairer.

The estimate is sent to the insurer to authorise. Being in control of who repairs the vehicle helps control costs, according to Hine.

“We go out to tender for repair, which helps manage the cost,” he says. “We’re not told where the vehicles should be repaired.”

Hine uses a local garage that he has a good relationship with, which ensures repairs are dealt with quickly.

“My repairer keeps me informed and if he hasn’t got a part we discuss using a second-hand one,” he says. “That’s the benefit of having a direct relationship.

"We can prioritise the work and keep downtime to a minimum. If we outsourced accident management, our vehicles might not be a priority because they deal with lots of cases.

"And I might not realise if a repair was taking a long time because I would be involved in other things.

“Managing it in-house means I’m in touch with it.”

An in-house approach also works because the university’s low accident rate means it is not an administrative burden.

“I can’t say that an in-house approach is right for all fleets,” Hine says. “It comes down to resource and the expertise to deal with suppliers and insurers.

“It also depends on the type of business. If the nature of the work is high-risk, they might have more incidents and require greater resource to manage accidents.”