How to Mitigate Rising Claims Costs for Motor Fleets

When it comes to haulage and logistics companies, insurance emerges as the third most substantial business expenditure, currently driven skyward in 2023 and into 2024 by escalating claim costs and consequent rising premiums. But did you know that missteps in the initial stages of filing a claim can unnecessarily inflate expenses and bloat those premiums?

Let’s look at a recent case study, an insured driver colliding with the rear of a third-party courier van, out on a delivery, and examine how a lack of procedural diligence and attention to the finer details can escalate claim costs, sometimes by as much as 500%.

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Best Case Scenario

Prompt reporting of the accident on the same day, coupled with the issuance of an Accident Report Form to the Third Party at the scene. The insurer promptly engages with the Third Party, extending support services, including provision of a replacement vehicle. This foresighted approach sidesteps credit hire costs and empowers the insurer to control repair expenses. Swift resolution mitigates the need for a Personal Injury pursuit. Claim duration: 10 working days, cost: £2,850.

Unadvisable Case

A delayed accident report by 15 days, with the Accident Report Form issued to the Third Party at the scene. The Third Party secures representation through their insurance broker, with a Credit Hire Organisation offering counsel. The Third Party, asserting innocence, proceeds with credit hire and repair. Though charges are deemed excessive, an opportunity to resist them exists due to the exchange of an Accident Repair Form. The Third Party, however, initiates a Personal Injury claim. Claim duration: 18 working days, cost: £8,350 – a 300% increase over Scenario 1.

Worst Case

A delayed accident report by 15 days, with no issuance of an Accident Report Form and no communication to the Third Party. The Third Party secures representation through their insurance broker, and a Credit Hire Organisation acts swiftly, informing the insurer about the claim on Day 2. Despite charges being labelled excessive, the absence of an exchanged Accident Repair Form leaves no room to resist them. The Third Party proceeds with a Personal Injury claim. Claim duration: 18 working days, total cost: £29,000 – a staggering 900% increase over Scenario 1.

From this case study, we see that a robust claims management policy is absolutely essential for every business, making sure each element of the claim process, from the First Notice of Loss, is watertight - with data collection at its heart and pivotal from the earliest stage.

Risk management tools are proving invaluable when making sure a claim is handled promptly and effectively: these include vehicle cameras, telematics and regular claims analysis. Such tools not only minimise negatives impacts on business during their renewals process, but also act as mechanisms to slow costs.

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Need more advice? Need a review or a quote on cover? Please contact Ascend today on 01245 449060 or email info@ascendbroking.co.uk.