Keeping track of third-party insurance costs
by Don Moore, vice-president of sales, Enterprise Rent-A-Car.
Most fleets have processes to manage their own drivers when they are involved in accidents, handling the vehicle repair and a replacement vehicle for the employee.
However, far fewer have something in place to manage third parties.
If a fleet driver is at fault for an accident during an at-work journey, that fleet’s insurer is liable for the costs incurred by the other driver (the third party) – which often include a courtesy car as well as any repair costs.
However, few insurers capture these third-party claims and manage that other driver’s repair and vehicle hire.
As a result, these claimants often end up in hire cars from other sources, such as credit hire firms.
The at-fault insurer is going to foot the bill, so there’s no incentive to shorten the repair time and get the third party back into his or her own car sooner rather than later – in fact, quite the reverse.
However, third-party claims costs are rocketing as a result. Insurers are feeling the pinch and passing it on in the form of higher premiums.
It’s worse if fleets self-insure, because they face that increase directly; if third party costs go up, it’s straight out of their pocket.
If fleets want to keep down premiums, they need to ensure their insurer has a system in place so it can manage any third-party claims itself. If a fleet self-insures, it must have some way to get hold of those claimants before someone else does.
And finally, where fleet drivers are the ‘not-at-fault third party’, fleet managers shouldn’t put them into the first free courtesy car that comes available.
It might not cost them anything now, but it’ll cost them in the future.