Outsourcing subrogation provides fleets with a dedicated team whose sole focus is on collecting every dollar that is rightfully owed to the fleet.
By Chris Villella, Vice President, Strategic Relationship Management, The CEI Group, Inc.
Subrogation can be a great tool to ensure fair compensation after an accident, but many fleets end up leaving money on the table; money that the fleet could have collected if they had an experienced team pursuing every possible dollar that can be collected from the at-fault third party.
The process of collection through subrogation is often complex, time-consuming, and riddled with obstacles that make it difficult for a fleet to “dabble” with subrogation. Luckily, there are experts to help fleets through the process.
So, what is subrogation? Subrogation is when one party collects a debt from a third party on behalf of the afflicted party. For example, if a fleet driver gets rear-ended by another driver, a subrogation expert can collect money on behalf of the fleet from the third party. The third party is the driver who rear-ended the fleet driver. The money collected is referred to as a “loss” that the fleet has incurred. These losses can be physical damage to the vehicle, downtime expenses, loss of use, rental vehicle costs, diminished value, product loss, and more.
Chris Villella, Senior Director of Special Markets with The CEI Group, Inc. and with 20 years of experience, states that, “managing subrogation in-house is definitely an option, but with all the other responsibilities a fleet department is accountable for and the amount of time it takes to properly investigate a claim, gather the proper recovery documentation, and negotiate a settlement, outsourcing provides benefits and results that can only be achieved through a dedicated resource. And in today’s world, we are all asked to do more with less.”
Villella explained that outsourcing subrogation provides fleets with a dedicated team whose sole focus is on collecting every dollar that is rightfully owed to the fleet. Insurance providers may look to pay as little as possible even though, by law, at-fault parties owe 100% of the damages. Underinsured and uninsured parties may likely have trouble producing the funds to cover the damages. A dedicated subrogation team has the necessary experience and knowledge to recoup the most no matter the situation.
Arbitration is a part of the subrogation process where having industry knowledge and experience is crucial to collecting all of the money that is available to a fleet. When going to arbitration, it is important to have the proper documentation and knowledge of the legal landscape, which varies from state to state.
If a fleet manager is saddled with the subrogation process and ends up having to go into arbitration alone, they could end up with a significant loss of money that the company is owed. Worse still, many fleet managers in this position may not have enough knowledge and won’t even enter arbitration. This alone is a good reason to consider outsourcing subrogation to companies that specialize in subrogation and only collect a fee if and when a claim is settled.
More and more companies with fleets and even general fleet service providers are looking to outsource to subrogation experts who combine proficiency, connections, and resources to ensure no money is left on the table.