Auto Insurance & Incident Reporting Time For Business

‘Insurance Claim Lag’, Your Auto Claims, and Your Business

Those seconds after an auto accident can leave those involved distressed and confused. Particularly for businesses, timely reporting is critical to the claim process. How quickly you make your report can make some surprising differences to the end result in terms of time, cost, stress and reputation.

Why does it matter how quickly you start your claim?

The time between the actual damage or loss of and the when this is reported to your insurance broker is known as clam reporting lag. There are lots of reasons that may increase this time, but it is in the best interests of your business to minimise this time, as claims adjusters have repeatedly noted that increased ‘lag’ times can have a negative outcome on the claim itself.

Motor Liability claims are fraught with difficulties, largely due to the having less control over the process. The third party has significant influence on what happens after the incident. In the first instance third parties may indicate that the claim will be a straightforward process with little or no contention. Over time they may have cause to reconsider their options. Expeditious claims reporting and handling are essential to reasonable and timely claim settlement.

Even when it may be clear that your employee is not at fault you may find yourself defending an action by the third party who disputes liability. Timely reporting gives the loss adjuster the opportunity to interview the employee, and any witnesses, quickly and obtain information from them whilst it is still fresh in their mind.

Five Reasons to Avoid Claim Lag

Even mere hours passing before you report an incident to your insurance broker or agent can affect the outcome of your claim. Below are a few areas to consider that may have a negative impact:

There is evidence to show that the longer it takes to get the ball rolling and communicate with any third parties involved, the more likely they will be to take their own action, being it making their own claim, or even taking legal action. The ‘instant’ nature of todays world means people expect things to happen quickly, and delays will put you and your business in a bad light form the get-go.
Delays can result in higher repair costs, longer car or equipment rentals, longer storage and more business downtime. In our salty ocean environment, a vehicle sitting unused awaiting repair can also deteriorate quickly, resulting in even higher repair costs!
Every day you delay your report, means more time spent dealing with the administrative fallout of the incident – amending project schedules, locating repair specialists, finding storage services, etc. By reporting the incident immediately, your broker can assist with many of these tasks, usually having priority links with preferred suppliers in a range of areas, leaving you free to get back to doing what you do.
Getting things moving in the minimal amount of time allows the adjuster to assess any liability you may be facing accurately and efficiently. If the claim is delayed, it becomes harder for an adjuster to examine the details and determine liabilities. Delays can also heavily impact the ability to detect the validity of counter claims by the third party, potentially increasing the liabilities you will face.
Reputational damage! Delaying the report can lead to delayed resolution not only for you, but also third parties involved. In today’s world, many people who feel disgruntled will take their grievances to the world via social media, and posts on platforms such as facebook can spread in hours, leaving your company with a serious dent in its reputation among the very market you work in. By keeping things moving with a prompt report and subsequent action, third parties are much less likely to feel they are being overlooked or mistreated.

So how can you minimise delays in making your insurance report?

The quicker you can make your report and ensure an experienced claim handler is on the case, the simpler the process will be for all parties involved, and the more likely things will be resolved positively. Here are our tips for keeping your insurance claim moving smoothly:

Ask an RMS Insurance specialist to help review your internal vehicle insurance reporting procedures. If the current process involves a lengthy path, RMS can advise on how to streamline the process to allow faster reporting to your broker or agent.
Make sure your internal policies instruct employees never to attempt to resolve an incident directly with the third party involved, or that person’s own insurance broker.
Ensure all employees are fully up to date on the correct procedures in place. Make it a part of their standard training and let them know incidents must always be reported, regardless of who’s fault it may be.
No matter what a third party may tell you, never assume a claim or incident will simply ‘go away’ – it’s highly unlikely and could cost you considerably in the future.
The Bottom line? Make sure you’ve placed your insurance with a broker or agent you trust completely, and one who has taken the time to understand your needs and find the right cover for you. That way, when incidents happen, and they will, you will be able to rest easy knowing you have a professional working alongside you to ensure your claims have minimal impact on your time, your bank account and your business.

Contact RMS today to discuss your business’ insurance and risk management.

When Risk is Managed, Opportunity Thrives