For fleet owners, the longer a vehicle remains out of service, the more money the owner stands to lose. Because automobile accidents continue to happen, fleet owners are accustomed to sending vehicles out for repair. What many fleet owners are not used to seeing, however, is protracted downtime and long backlogs in the repair process. Shortages in labor and automotive parts are increasing fleet risks — and raising claim costs. Fortunately, fleet managers and insurance professionals have options to mitigate these trends. Before the pandemic, a relatively simple repair for auto physical damage — a fender-bender, for example — might have taken a week to schedule and about five days for the repair shop to complete the work. In current market conditions, that same repair job is taking longer to schedule and may take seven to 12 days beyond that, if parts are already on hand. If parts must be ordered to complete the repair, the repair timeframe alone could easily extend to 24 days or more. For revenue-generating vehicles, as many fleet autos are, every tick of the clock in downtime represents additional expense to the owner. At the same time, repair costs are rising due to higher prices for replacement parts. What factors are driving these trends in fleet claims? There are three main causes: Fixing global trade problems and economic inflation is beyond the reach of fleet owners, risk managers and insurance professionals, but they can take steps together to mitigate risks and minimize the local impact of these trends. One step is to give careful thought to triaging repairs and scheduling needs. If a vehicle is damaged but drivable and still safe to operate, the owner could defer the repair. On the other hand, a fleet owner might consider operating a damaged revenue-generating vehicle to hurt its brand perception. In that case, scheduling a repair as soon as possible might take priority. To find a repair shop with available capacity, it's prudent to work with an expert partner that has a broad network of repair facilities. Amid parts shortages, another step is working with expert partners to determine the cost-effectiveness of repairing vs. replacing damaged parts. Repairing existing components, if doing so doesn't compromise safety or quality, might be a better option than ordering replacements. Knowledgeable automotive industry partners can assist in identifying alternative suppliers when replacement is necessary. There are three general categories of replacement components: original equipment (OE), or parts that are identical to those used by or recommended by the vehicle manufacturer; automotive aftermarket, or parts made by other vendors that are designed to fit specific vehicles; and like kind and quality (LKQ), which may include salvaged, reconditioned or remanufactured parts. To minimize downtime on fleet auto claims, working with an experienced claims company can also make a difference. Thorough initial inspections can provide more accurate evaluations at the beginning of the claim and reduce surprises during the repair process. Accidents will happen, despite fleet owners' best efforts to prevent them. Mitigating the risks of costly downtime and avoiding prolonged repairs is possible by choosing the right partner for fleet claims. For more information on managing fleet risks and reducing vehicle downtime, visit https://www.fleetresponse.com/. Fleet Response is a Hudson, Ohio-based company specializing in third-party administration for automobile claims. Fleet Response offers claims, safety and compliance solutions to fleet managers, risk professionals and safety teams. Its services include first-party auto, third-party property, customized general liability claims management and subrogation services.
What's causing this problem
Risk mitigation steps
Stuart (left) joined Fleet Response in 2006 and serves as Adjuster and Maintenance Manager. His responsibilities include managing the collision repair process, maintenance department and vendor procurement, implementation of standard operating procedures for both accident and maintenance management. Stuart spent his previous 15 years working for a large auto dealer where he worked as technician then as Body Shop Manager. Stuart is ASE Certified and an I-Car Platinum training recognition.
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