It’s a service that made its debut in the early ’70s; accident management (or collision management). Prior to the 1970s, drivers were on their own to report accidents, obtain shop estimates, and, if needed, get a replacement rental while the company vehicle was in the shop. Some of the process was handled by the fleet department, some by risk management. The purpose of the service was to get the driver out of the process and back on the road, while providing the fleet manager with resources and expertise that few, if any, had. All with the simplicity of a single, toll-free phone call.
Has it worked well? It sure has. More fleets than ever now take advantage of one of the various suppliers’ programs available to them. Repair costs are down, subrogation recovery is up, and drivers’ hands are held throughout the entire process.
However, many fleets are now looking for more: They’re looking to prevent accidents from happening in the first place. Accident management is becoming risk management, and suppliers are working hard to provide the tools.
What’s The Difference?
First, a quick comparison of the two concepts. The difference between managing accidents and managing risk is clear: the former is reactive, the latter is preventive. One is in no way “better” than the other. Accidents, once they’ve occurred, do need to be managed, or at least the process does. The effects are well known.
First, there is shock, especially if the driver is injured. Then there’s that sick feeling of finality — it has happened, it’s not possible to rewind and start over. Next is anger — at yourself, if you are at fault, or at other parties, if someone else is. This is followed by confusion: “What do I do now? I have meetings to attend.”
Shock, anger, confusion: it isn’t a pleasant experience.
What accident management brings to the process is first the knowledge and comfort that the driver is not alone. Someone on the other end of the phone is trained to calm the driver down, walk him or her through the process, ask the right questions, and gather information on the driver’s behalf. The goal is to get the driver back on the road as quickly and safely as possible. What it brings to the fleet manager is similar with additional resources he or she doesn’t have available.
Risk management, on the other hand, is a process in which the goal is to prevent, or limit, the occurrence of accidents in the first place. It uses data to determine which drivers, or types of drivers, are most likely to have accidents, and what actions to take to prevent them.
Accident and risk management, therefore, are not in conflict, but are complementary. Work to prevent accidents, and if they occur work to smooth and expedite the process of managing them. Successful, efficient fleet operations need both.
A typical accident management program consists of the following services/processes:
- Accident reporting. The supplier will, based upon the drivers’ call, produce a standard format accident report (the Association for Cooperative Operations Research and Development [ACORD] form is most commonly used), and distribute copies to parties as instructed by the fleet manager.
- Repair management. The supplier provides a national network of pre-screened repair facilities, arranges for a tow if needed, obtains the estimate, negotiates agreed pricing, tracks the repair progress, and pays the shop when repairs are completed. Repairs are usually guaranteed for the life of the vehicle in the fleet.
- Replacement rental. The supplier will arrange for the delivery to the driver of a replacement rental vehicle, so that the driver can remain on the job while repairs are being performed.
- Subrogation. The process of pursuing recovery from other parties begins almost immediately. Suppliers are well versed in all states’ liability laws, and will pursue recovery of costs on behalf of the customer.
- Reporting. Records of all costs and all subrogation recoveries are made available to the customer to track loss ratios, average repair costs, etc.
The goal of an accident management program is to reduce all costs related to accidents: physical damage, rental costs, and maximize subrogation recovery. In and of itself, this process is not preventive; it is reactive.
There are numerous definitions of risk management. Essentially, risk management from a fleet perspective is the process of identifying, developing processes to deal with, and mitigating the risks associated with the provision of company vehicles. Fleet risk management deals with risks associated with drivers, the vehicles provided to them, the job they do, and where they do it.
While accident management is a well-defined service, risk management is more amorphous, less definitive, and lends itself to a more customized solution.
First, a fleet manager is interested in balancing the skills and experience of new hires with the risk of putting them behind the wheel in the first place. This process begins with MVRs.
As part of the hiring process, the company should review the driving record of any candidate who will be assigned a company vehicle. The existence of violations or records of accidents can be a red flag, more so if there is a pattern present. However, there are two schools of thought as it pertains to such records. First, from a purely statistical standpoint, if a driver has had an accident, he or she is not likely to have another (i.e., if 20 percent of all drivers have accidents, this driver has “already had one,” and thus is a lower risk than one who has not). The other view is that if a driver has had an accident, he or she has, thus, been shown to be a risk, and the company should proceed cautiously.
Most fleet managers will tend to view the accident as a risk, which is probably a smart position to take (or at least a careful one). MVRs should be checked on all new hires, as well as any family members who may also have the privilege of driving the vehicle if policy permits.
Trends are more important here than the mere presence of negative events. A driver who is cited for violations over a period of time (no matter how minor) would likely be a greater risk than one whose record shows only one serious violation. The fleet policy should also call for regular MVR reviews on all existing drivers, as well as clearly defined consequences for the appearance of violations or accidents.
Safety Training Core Program
A core process in a risk management program is safe driver training. Whether the MVR checks show violations or not, all drivers should undergo driver training, both as new hires as well as existing employees.
Safety training has come a long way since the days of written tests and behind-the-wheel training. Drivers can access driving simulators, “virtual” training via the Internet. Groups of drivers can be trained simultaneously via webcasts.
The key point in safety training is that repetition of the message is critical. Most drivers are well aware they shouldn’t speed, tailgate, or drink and drive, and that they should signal when changing lanes, etc. This knowledge, unfortunately, will often get lost as drivers go about doing their jobs, and driving becomes only a mundane part of the day.
Repeating the safety message is part of the training process. Safety should be part of every meeting, every piece of communication, every conversation. A “culture of safety” should permeate the company, and the only way to do it is to repeat the message, and keep safety paramount on the minds of drivers.
Today, training can be customized to an extent that was difficult, if not impossible, in the past. A driver who has an accident due to following too closely, for example, can receive a training module targeted to this problem.
As drivers have accidents or receive violations, they can be required to undergo this type of custom training, again, to emphasize the message in a manner targeted to their own behavior.
Risk management has become more and more sophisticated as the tools and technology of the process continue to advance. There is research now being performed that analyzes multiple factors, which statistically can be shown to increase the risk of bad driving outcomes by:
- Personality type.
- Time on the job.
These and more factors can be predictors of unsafe driving habits, or the propensity to have accidents or incur violations that can lead to them. However, this type of research raises very obvious and dangerous red flags.
It is simply against the law to act on risk associated with age or gender, for certain, and any fleet manager who attempts to do so is in for a rough ride. A young male driver, for example, may well be a “statistically” greater driving risk than his female counterpart, no matter what their respective driving records indicate. But, certainly the company cannot, for example, limit any company car assignment or require any probationary period simply based upon his age or gender.
There are, however, other factors that can be used in the risk management process.
Location can exacerbate risk. For example, a driver who has only recently moved to a new territory, or who has been reassigned to a new territory with which he or she is not familiar, can most definitely be a greater risk — simply due to lack of familiarity with the area.
Drivers can be distracted if they don’t know where they should go or how to get there, and distraction is itself a major risk factor. Drivers in inner cities are at greater risk than those in rural areas, simply because there are more vehicles and more “opportunities” for accidents to occur. Statistical analysis can be a boon, provided fleet managers are careful about how they use it.
Prevention Begins with Policy
We can see the symbiosis between managing accidents and managing risk. From a practical standpoint, fleet managers need to develop a process where they are complementary.
It all begins with policy. A fleet policy document should be clear in what is required of drivers, what they can expect in training, and what the consequences are should they violate that policy.
Drivers should understand that, although the company will provide tools to help operate a company vehicle, they are responsible for their own behavior behind the wheel. They also ensure that family members who may drive the vehicle understand the company car isn’t a gift, it is a privilege, and they are expected to follow the company policy as well.
The policy should also contain specifics as to what can and cannot be done, what should and should not be done:
- Cell phones: hands free only, and only if local and state laws and regulations permit.
- No texting while driving — period.
- Seat belts are to be used at all times, by the driver and all passengers. The vehicle should not move until everyone in it is buckled up.
- Abide by all traffic laws and rules at all times.
- Keep the vehicle maintained according to policy. Keep it clean, and do a walk around inspection every day before driving.
- Eating, drinking, and smoking in a company vehicle are prohibited.
These are all risk mitigation factors; they are geared toward preventing accidents and injuries. In the event they do occur, the accident management program “kicks in,” to help the driver minimize the negative effects they have.
Different, but Complementary
It’s clear how accident and risk management have evolved, what each is supposed to do, and how they work together.
Fleet managers have become more aware of the value of risk management, and fleet suppliers have developed sophisticated programs to address that awareness.
Much of these programs can be handled in house; many companies do so. But, as with any other fleet program, if the resources and expertise needed are available outside the company, and the price is right, it is generally more cost effective to manage the supplier than to manage the program itself.
All in all, keep the basics in mind:
Accident management is reactive to something that has already happened; risk management is preventive, keeping those things from happening in the first place.
Each complements the other.
Accident management helps drivers during the process, and gets them back on the road.
Risk management helps the company identify risks and deal with them in a way that prevents accidents.
There are numerous risk factors present in fleet; be careful which are used to take action.
“An ounce of prevention is worth a pound of cure,” the adage goes, and this is certainly the case as it pertains to fleet.
The more accidents that can be prevented via safety training, applying risk factors to both new hires and existing drivers, and consistently communicating the safety message to them, the more savings will be seen.
With an accident management program in place, when crashes do occur fleet will be better equipped to deal with them, and minimize their associated costs.