Automotive Rental, Incorporated’s Fleet Insurance Management Program was created as a response to the needs of one of their clients, John Connelly, fleet administrator for the Siemens Medical Systems’ fleet of 1,500 vehicles. Connelly wanted assistance in handling the volume of insurance-related calls from his drivers and in scheduling repair work on vehicles involved in accidents. As with many large corporations, Siemens is self-insured for collision, and Connelly’s request was specifically for physical damage-type claims. Ed Kemps, ARI’s manager of fleet insurance, put together the program.

Since that time, ARI has expanded into many other areas of insurance – providing liability, fire, and theft coverages, plus administrative services. “We can handle any fleet insurance request,” Kemps says, “from administering self-insured collision, pursuing subrogation, to providing coverage with liability, collision, fire, and theft, or a totally comprehensive fleet and risk management program. For a good number of years, insurance has been the responsibility of the lease customer. In recent years, our service as a leasing company has expanded to the point where we are now more a fleet-management company. We no longer strictly lease a vehicle. We have been providing our customers with many fleet management programs, computer reports, tire, and maintenance programs – a total management package.

“Insurance coverages have also changed,” Kemps continues. “Many of our corporate customers have gone to a self-insured concept on physical damage (collision, comprehensive, fire, and theft). They actually have been paying for these types of claims out of their own corporate reserve money rather than pay high insurance premiums to an insurance carrier. Many companies have come to us and have asked us to provide an insurance program for physical damage or a total insurance package. In the last year, we have responded to those clients’ requests by developing various types of insurance programs – some with self-insured administration and others through our own insurance company. We’ve been insured with the same company since 1948, and we feel very secure knowing they are our carrier. They provide excellent service and consistent coverage at a competitive price. Under our various programs, we take over the responsibility of claims and accident reporting. We take reports from their drivers, arrange for repairs, authorize and pay for repairs; in the case where the adverse party is responsible for the damage, we pursue the subrogation claim against them to recover damages that were sustained by vehicles.”

Kemps, who spent 10 years in the insurance industry and the past 15 years as ARI’s corporate insurance manager, outlines ARI’s program. “The total program has four areas that ARI covers: 1) Accident Reporting, 2) Subrogation, 3) Full Insurance Coverage including liability, and 4) Risk Management.” On the last program, Kemps reviews with a customer their present insurance policies, loss experience for the last two to three years, coverages, and limits. Risk management includes an analysis of where and how their accidents are occurring and whether their coverages, rates, and accident-reporting procedures are proper.

“We provide various reports that show a client the types of accidents their drivers are having,” Kemps says, “the amounts of damage, the severity of the accidents, and status of subrogation recovery. We show the client what percentage of their total losses are being recovered by ARI’s policy of vigorously pursuing each and every claim against insurance carriers and uninsured motorists.”

In addition, many other services are provided – once-a-month billing on the rental invoice, insurance ID cards, filings with the various state motor vehicle departments, quarterly loss reports on liability claims through ARI’s insurance carriers, or monthly reports on collision claims.

When questioned as to the most beneficial part of the program, Tom Donato, fleet services manager, says he feels there is “no single item; it varies with the customer. Sometimes it’s the subrogation that has often been ignored. Although the automobile subrogation recoveries can represent a substantial amount of money, corporate insurance and fleet departments many times don’t have the time to pursue these claims. ARI’s recovery is 25 to 30 percent higher than what either they or their carrier normally would recover. So for some customers, this is a big overhead expense we’ve taken away from them, along with adding to their bottom line in increased recoveries. With others, it’s the fact that we’re handling the driver calls. The company doesn’t have to get involved other than to make sure that we’re doing our job by reading the monthly reports and monitoring driver feedback. In some cases, it’s simply the fact that we’re providing liability, fire, and theft coverages with a premium that is frequently substantially lower than what they were currently paying for the same coverage.”

Kemps explains procedures a driver involved in an accident follows with ARI’s program to assure that he or she is back on the road as soon as possible. “Most people don’t have many accidents, perhaps one in a lifetime,” Kemps says. “You are dealing with people who have no knowledge of insurance; they’ve had an accident and don’t know what to do. Their first response is to call their company and try to ascertain ‘What do I do now?’ In many cases, the company fleet administrator or the company insurance department is not even familiar with their own procedures. What we have done, before we provide the services, is set up a procedure (with the company blessing) that will work to their advantage in terms of having these accidents reported properly, and then being able to tell the driver exactly how to handle an accident. Typically, the driver has an insurance packet with instructions in the glove compartment.

“These instructions,” Kemps continues, “include calling ARI’s 800 number to make the accident report. Our representative advises the driver how to handle the claim. A request will be made at that time for a follow-up written document. The driver also will be asked to get estimates of damage, which are phoned in to ARI (if less than $1,000 or company’s parameters). Immediate authorization is given for repair work with a written purchase order as a follow-up. In excess of the company’s parameters, we have a national account, an independent appraising company, to whom we assign the vehicle for inspection to determine the extent and cost of damage.”

Donato sums it up: “We feel that ARI offers a unique service, tailor-made to the fleet business. In the course of a year, this program has grown from 1,500 vehicles to almost 7,000. Acceptance by our customers has been very good. It’s a program that’s needed. It’s a program that is responsive to a fleet manager’s needs.”

Tom Donato and Ed Kemps check vehicle damage.

Donato and Kemps go over an ARI policy.