03 Aug Subrogation Management Strategies for Self-Insured Fleets: Maximizing Cost Recovery

Subrogation management is a critical component of all fleets, especially those that are self-insured. Subrogation, which could also mean substitution, is a term used to describe the process of collecting on a debt by one party on behalf of another party. When you consider fleets and fleet management, subrogation relates to the process where:

• One party seeks recovery of the losses that another party suffered 
• That loss is due to some level of negligence on a third party during a vehicle accident

Subrogation management strategies allow companies to seek out the compensation they are owed fully and with more specialization and support than they would get on their own. This is important. You could do this yourself, but hiring a company to handle the process for you – especially subrogation specialists – allows you to include all costs, and that often goes well beyond repairing the physical damage. 

With effective subrogation management, companies are often better able to recover more of their losses. Recovery occurs when the other party is at fault, and proving that is not always easy to do. Having a highly experienced professional manage the process for you increases your chances of recovering more of what you’ve lost.

Here is an example of when this may apply. Suppose someone else causes an accident in your vehicle but they don’t have enough insurance. In that case, your uninsured motorist coverage may kick in, requiring your personal insurance company to pay out the claim. However, subrogation enables the insurance company to pursue the actual responsible party, even without any insurance, to cover the losses they’ve caused. 

Understanding Subrogation Management 

Subrogation management teams work to support the subrogation process. They provide a variety of services to do this, including identifying opportunities for recovering losses from at-fault parties. They will work to first investigate the incident, determine who all parties are, and then determine which financial sources for reimbursement may exist. Subrogation managers need to gather evidence to support any liability claim.

When a fleet is self-insured, it is critical to ensure that subrogation management specialists are available and utilized to ensure that full recovery of losses is obtained. Otherwise, there is money left on the table during this process. Subrogation management firms provide a critical service to companies, typically aiding in finding and securing funds that would otherwise be lost.

Key Elements of Subrogation Management 

Subrogation service providers offer a wide range of services to their clients. Among those services are:

• Identification of all at-fault parties and responsible parties in the incident. This is often not just one party but numerous organizations, from vehicle manufacturers to cities, who created risks that led to losses.
• Determine liability and recoverable damages. It is not just the physical damage from an accident that can cause numerous losses for companies. Unfortunately, most companies have undiscovered losses such as loss of productivity, long-term limitations on employees, and much more. 
• Applying relevant state regulations and laws. Each state has its own set of laws related to the recovery process as well as subrogation. Typically, the amount of damage and recovery may range widely from one state to the next. 

Subrogation management firms are also very information-heavy companies. They can offer a great deal of insight and support after such an incident occurs, helping to guide organizations to faster and more effective resolutions of their most complicated problems and financial losses. 

Benefits of Effective Subrogation Management

Working with subrogation specialists empowers companies. It gives them the support and guidance they need through some of the most important and difficult processes. Consider some of the core benefits these services can offer.

Maximizing Cost Recovery

This is the biggest and most impactful benefit that these services offer. Though statistics range, many organizations can expect significant increases in the amount of money recovered after such losses. Because of their experience and depth of insight into the market, these organizations can provide a better opportunity to recover.

They also pursue all types of recovery costs. That includes costs associated with the following:

• The accident itself
• Damages incurred
• Liability matters

By seeking out and applying subrogation management strategies, these organizations are highly capable of not just recovering more, but the direct benefit of that is less financial impact on self-insured fleets. In some situations, that is critically important to maintaining financial viability.

Improved Claims Handling Efficiency

Organizations can indeed pursue this process on their own, but doing so is time-consuming and often drawn out due to inefficiencies. Yet, every day that those funds go uncollected is a day that the company has limited financial resources to meet its needs and to cover additional losses over time. With the help of a specialist, by comparison, it is possible to:

• Reduce any settlement delays, which are commonly a way to reduce payments or frustrate victims
• Reduce the potential and likelihood of added costs associated with such delays

In effect, these specialists work to streamline every aspect of the claims process because of the experience and industry skills they have. That helps to ensure timely subrogation actions, which is critical in most organizations.

Mitigating Future Risks

Additionally, these organizations work to identify patterns and trends in a company’s accident history. This allows organizations to take aggressive measures to minimize future risks. Preventative measures like this, especially for self-insured companies, are critical to minimizing losses in the long term.

Ultimately, their ability to provide insight and guidance allows for the enhancement of fleet safety and ultimately helps to reduce future incidents highly effectively.

Strategies for Maximizing Cost Recovery

While the use of subrogation specialists is a valuable decision, many wonder what these providers are doing to make such a difference in outcomes. Consider some of the most impactful subrogation management strategies available.

Prompt Investigation and Documentation 

With experience comes the ability to manage difficult situations with ease and speed. Specialists conduct thorough investigations to gather full evidence of what occurred to quickly move to prove liability. They can document all damages, injuries, and related expenses not just quickly but highly accurately. 

Timely Contact and Demand for Restitution

Once they have information in hand, they work to initiate contact with the responsible parties quickly – often within a matter of days after an incident. Speed to this process is critical in ensuring the best possible recovery. This type of speed isn’t possible without specialization in the field. 

They then assertively demand restitution for damages and losses. This is not the time to be supportive and patient.

Legal Expertise and Compliance

These management firms can understand state regulations and all legal requirements for subrogation without having to learn the ropes. Unlike fleets themselves that may not have a lot of experience and could make costly mistakes, these firms are highly prepared to act quickly within the letter of the law. 

They also collaborate with the legal professionals necessary to ensure that compliance exists as well as to support the successful recovery of losses. 

Effective Communication and Negotiation

With evidence behind them, these organizations can then work to resolve matters. They have strong relationships with companies already in place as well as many third-party organizations and legal representatives. They use skillful negotiations to achieve fair settlements and maximize the recovery the client sees. Ultimately, good communication and negotiation help to minimize complicated legal matters and ensure a positive experience for all involved.

Technological Tools and Data Analytics

Another core benefit to working with subrogation management firms is that they can utilize subrogation management software for components of this process. That helps to ensure efficient tracking and documentation of every stage of the process. It also facilitates the ability to analyze data to identify opportunities that could speed cost recovery and streamline processes fully.

Partnering with Subrogation Specialists

There are multiple reasons to partner with these professionals.

Outsourcing Subrogation Management 

Organizations that invest time into working with specialists benefit time and time again. By partnering with a specialized subrogation management firm, it’s possible to minimize delays and speed the recovery of higher dollar amounts. That is due to having direct access to their expertise, resources, and industry best practices.

Evaluating Subrogation Service Providers

Organizations ready to hold those responsible for creating such losses need to turn to a company that can provide effective support for self-insured fleets. Be sure to choose a reliable and experienced partner who specializes in this area. Evaluate their track record, industry reputation, and client testimonials to achieve the best possible outcome.

Seek Out Support Today

Subrogation management for self-insured fleets is critically important to the financial well-being of many organizations. The key here is selecting the best team for your organization based on the subrogation management strategies they can offer.

Explore professional subrogation management services for optimal financial outcomes. Turn to Fleet Response today to learn more.