##MikeTaylor--left## 'THE cost of a motor accident claim to a fleet can be broadly divided into three categories.
Firstly, there is the direct cost of repairs which fall below the policy excess. Then there is the indirect cost – the cost of the fleet's claims to the insurer.
Although these claims are borne by the insurer, the cost of the claims will have a direct effect on the amount a fleet pays for its motor insurance.
Finally, companies have to bear hidden costs such as the time a vehicle is off the road, the cost of failed deliveries and employee downtime.
Clearly, prevention is better than cure and the simplest way to cut the cost of accidents is to avoid having the accident in the first place. Some accidents are avoidable and the frequency of all accidents can be controlled.
Fleets have to bear the direct cost of repairs which fall below their policy excess, together with the cost of administering these accidents. Outsourcing these claims to an accident management company can control these costs.
They are the experts in managing costs and use a variety of methods to achieve savings, ranging from uninsured loss recovery to risk management services.
Your insurer will pick up the rest of your claims cost, but remember the amount of the claims will have a direct effect on premium levels.
In simple terms, at renewal, the underwriter analyses the cost of claims (the claims experience) and compares this to the premium that it has received. This produces a loss ratio – an important factor in calculating the premium which may decide whether an insurer will offer a quotation or not.
Therefore, fleets that help insurers to make savings in claims costs and improve their claims experience will, in turn, benefit from premium savings. You can minimise the amount paid by insurers and improve your claims experience through some simple measures.
If an accident involves a small third party property claim alone, then it will be more cost-effective for you to advise insurers that you intend to pay for these claims yourselves in order to protect your claims experience.
Ensure that you report accidents promptly to insurers. The manner in which insurers deal with claims is governed by protocols which impose strict timetables upon insurers in terms of investigating a claim and replying to third party correspondence, with penalties for non-compliance.
Furthermore, if an insurer is able to contact a third party immediately, again, this can minimise the cost of the third party claim. It can also avoid the necessity for a third party to use solicitors to pursue their claim. Late notification provides insurers with a costly headache.
When reporting an accident to an insurer, not only should you ensure that a claim form is completed in full but also provide a clear statement from the driver setting out the circumstances of an accident. It will cut down insurers' costs if they know exactly what has happened from the outset.
Also, ensure that the driver's statement clearly indicates whether you feel the driver was responsible for the accident or not.
If you advise insurers that you are to blame for an accident, this will allow them to settle a third party claim promptly, minimising the cost of the claim. On the other hand, if you have explained the circumstances and made it clear why you are not to blame for an accident, again, this will assist insurers in defending the third party claim.
Claims experiences often tend to contain a few large claims and changes in these claims can have a substantial effect on the experience. Your accident management company or insurance broker will identify these claims for you. The progress and cost of these claims can then be monitored and you can ensure that as much information as possible regarding the circumstances of these accidents has been provided to insurers and that they are defending these claims, where possible.
In general terms, the overall cost and frequency of accidents will continue to rise. The average motor claim payout has risen by 28.6 % in the last year alone according to Datamonitor.
However, if you follow the steps outlined you will have the means to buck this upward trend and drive down the cost of accidents.