To see Automotive Fleet's 2013 Accident Management Survey article, click here.

At a Glance

A marginal increase in accident costs was seen in 2010 due to such factors as: 

  • Increased in-vehicle technology
  • Use of new, waterborne paint technologies
  • Exotic metals
  • Vehicles kept in service for longer periods of time
  • Increased parts prices


In-vehicle technology is increasing — from collision avoidance systems to additional air bags — all of which is impacting the cost of accident management.

Accident management costs stayed flat, or increased marginally in 2010 over previous years. Automotive Fleet spoke with several industry experts to gauge accident management costs, trends, and what actions fleet managers can take to reduce this expense.

“We have seen a marginal increase in our average repair ticket over the last year. Cost increases have been a result of safety enhancements and computer technologies in the vehicle,” said Stuart Braun, adjuster and maintenance supervisor for Fleet Response. “More vehicles are equipped with collision avoidance systems and supplemental restraint systems, with up to six air bags per vehicle. These items paired with waterborne paint technologies and exotic metals have led to the increase in repair costs for our clients.”

Complicating matters is the fact that fleets are still in the same cost-control mode they’ve been in for the last several years.

“Depending on the age of the vehicle, as much as possible, fleets continue to avoid repairs they deem to be cosmetic. It’s not surprising that they’re more likely to repair cosmetic damage on a newer, low-mileage vehicle than an older or higher-mileage vehicle,” said John Wolford, senior manager, provider & network services for CEI.

PHH Arval is witnessing a larger number of accidents in light-duty trucks and upfitted vehicles, which has driven average costs upward.

“However, this has been offset by clients keeping vehicles longer, affording greater opportunity to utilize alternative or used parts,” said Eliot Bensel, director, vehicle accident services, PHH Arval.
Based on Fleet Response’s experience, “the downturn in the national economy has not directly affected accident management costs,” said Braun. “However, we have seen certain segments of our client base reporting fewer accidents as they have fewer vehicles on the road from previous years.”

Fleet Response continues to see clients repair only safety-related repairs, while foregoing cosmetic repairs on service and sales vehicles alike.

“The cost of accidents continues to rise because parts prices continue to increase, and there is a greater use of parts that can’t be repaired and must be replaced in the design of today’s vehicles, which is a more expensive alternative. Computers in cars and plastic parts are examples of the kind of parts that usually must be replaced instead of repaired. We’re seeing more plastic under the hood, things like cooling assemblies, fan assemblies, engine intakes, radiator supports and tanks, and even valve covers,” said Wolford of CEI.

According to Greg Neuman, quality control supervisor, senior staff appraiser, provider & network services for CEI, “We used to see parts price increases from the OEMs about once a year. Now they can occur at any and all times of the year. However, many of the increases have not been significant. It looks like competition with aftermarket parts makers has helped hold down price increases from original equipment manufacturers (OEMs). On the other hand, wherever possible, OEMs are now branding parts. For example they’re including the vehicle make name as part of the bumper. In one case, an aftermarket bumper had cost $300, but the OEM bumper with the model name molded into it was priced at $600,” he said.

Reviewing Accident Management Trends

Downsizing and right-sizing are two common trends fleets are using in reaction to the current high cost of fuel. However, these practices are having unintended results.

“In some cases, downsizing due to the economy has caused companies to take a look at more outsourcing of their fleet operations,” said Bensel of PHH Arval. “This is especially true of the communications industry, which, in many cases is growing more rapidly than infrastructures can support and outsourcing becomes a very viable alternative.”

A current trend Fleet Response noted is the rise in salvage vehicle prices.

“As a result, the price for LKQ (like kind & quality) or used parts is increasing, making them sometimes cost prohibitive to use,” said Braun. “In the past, a lot of fleets opted to use alternative parts or started reconsidering using them. Now, with the rising cost of the parts, it is taking that consideration out of the mix.”

In general, according to PHH Arval, fleets are continually working to strike the right balance between a safe and economical repair.

Additional trends are related to cost avoidance. “One difference we saw last year was that the repair cost avoidance choice was much more widespread than in 2009, with many more fleets making that choice,” said Wolford of CEI. “Fleets continue to rely on other cost-saving approaches, including using aftermarket and used parts and paintless dent repair (PDR) whenever possible.”

However, a slight increase in the percentage of claims in which the vehicle is repaired has occurred, as fleets have reached the end of the vehicle surplus that was built up following layoffs.

“During 2009, we found fleets were swapping good-condition surplus vehicles for accident-damaged vehicles and, now that the surplus inventory has been used up, fleets are now repairing more vehicles,” said Wolford of CEI.

Moving forward, a decrease in accident management costs could be on the horizon.

“We anticipate a slight decrease in accident management costs. In addition, we are seeing more availability of pool or unused units that impacted replacement vehicle or rental costs,” said Bensel of PHH Arval.


Utilizing Proactive Fleet Management

The amount of in-vehicle technology is increasing, allowing fleets to utilize the practice of proactive safety management. The technology is currently being used for more sophisticated driver safety training, including Web-based and simulator training,” noted Bensel of PHH Arval. “A result of which will be the application of predictive analytics to research attitude and behavior to allow more focused driver training.”

One of the latest trends Fleet Response is seeing in proactive fleet accident management is that more and more companies are reevaluating costs and reaching out to vendors to renegotiate pricing.
“We are seeing a number of companies more willing to unbundle services and use multiple vendors for leasing, accident and maintenance management,” said Allison Lanzilotta, VP of business development for Fleet Response.

“By renegotiating pricing with current vendors or unbundling services and using multiple vendors, companies are potentially saving money on their accident management costs,” said Lanzilotta. “Unbundling services allows companies to work with multiple vendors that specialize in one or more aspects of accident management. A company that specializes in one or two aspects of the industry has more expertise and can most likely offer better competitive pricing than a company who bundles all services around their one area of expertise.”

Reducing Accident Costs & Reviewing Policy

As more people drive for their jobs, and are increasingly exposed to more time on the road, the probability of having an accident increases, as well as overall risks and costs, according to Bensel of PHH Arval.

One way Fleet Response is helping fleets is through taking a consultative approach, reviewing a company’s existing safety policy and expanding its scope to include driver profiles, risk assessment, motor vehicle records (MVR) on all authorized drivers, and a way to combine accident history with MVR results and training assignments.

“We offer the services of our safety team to analyze current fleet accident trends, training programs, and hiring practices and provide our clients with a detailed summary of what is working and develop an improvement plan including target goals,” said Lanzilotta of Fleet Response.

Lanzilotta continued, stating “General safety training is assigned to all drivers based on common behaviors of the particular fleet. The top five preventable accidents or top cost accident reasons are a good measure to determine which training content should be provided. This type of training demonstrates corporate dedication to make sure everyone is trained to be safe drivers,” she said.

Additionally, targeted training is as-signed to a specific driver or a segment of drivers that exhibit certain negative driving behaviors. “Targeted training can be a consequence of MVR infractions, an accident in a company vehicle, or any type of policy violation,” said Lanzilotta.

Also, a policy test can help reinforce a company’s expectations by requiring drivers to confirm they have read and understood the contents of the fleet policy.

“A successful pass rate of 100 percent on the quiz means drivers fully understand what is expected of them,” said Lanzilotta. “By implementing various types of training, our clients create training programs that are comprehensive, specific and repetitive. Overall, this approach provides drivers with the tools and directives needed to do their job more safely and can reduce the incidence of preventable accidents in fleets,” Lanzilotta continued.

To reduce the incidence of preventable accidents in fleets, Bensel recommended increasing the frequency of driver record checks to annual or biennially.

“This will help identify risk in your fleet and allow you to provide targeted training to reduce accidents,” he said.

Accident Management Best Practices

“Fleets who truly employ best practices are ones who adopt safety policies and practices from the top down creating an overall culture of safety that is embedded in the fabric of their organization,” said Bensel of PHH Arval. “Centralized or regulated fleets tend to be better positioned to adopt a culture of safety.”

For fleets that charge an employee a deductible for preventable accidents, “one advantage is that drivers are becoming more conscientious knowing they have financial responsibility,” said Lanzilotta of Fleet Response. “However, as a result of charging a deductible, some drivers are also hesitant about reporting claims immediately, which can provide a disadvantage to the company. Some of our fleets who have implemented this deductible for preventable accidents have also seen an increase in their hit-while-parked and unattended claims.”

Bensel of PHH Arval echoes this sentiment.

“When implementing a program that imposes employee paid deductibles you need to be mindful not to incent bad behavior.  Some programs inadvertently incent drivers to not report, or to report inaccurately when deductibles are involved,” he said.