January 2008, Fleet Financials - Feature
Intangibles Make the Difference in Successful Subrogation
By Robert Martines
Persist in Collection Efforts
Underinsured or uninsured motorists pose a set of problems that can be challenging as well. Underinsured motorists can legally obtain insurance at a state’s minimum requirement. These motorists can insure for as little as $5,000 of coverage, cause $20,000 in damage, and if their insurance company offers to pay the $5,000, the insurance company will do so as long the claimant releases their insured party from further liability.
Uninsured situations create the most work because persistence is required to collect; claimants start with zero and work up.
What do all of these problems mean to the self-insured corporate client without the staffing or knowledge to begin the process? Corporate management shouldn’t fool itself into believing that just because it was successful in less difficult claims, the process is easy. One answer is to find a person or a company well-versed in subrogation and with a proven track record in collections.
Professional subrogation experts understand the true cost of an accident. Many factors come into play: actual physical damage loss, rental expenses, lease payments, downtime, loss of use, product loss, diminished value, and much more. Insurers know what they are responsible to pay; however, they will not pay a dime more than they are asked. Nor will they volunteer free advice. Like a good attorney going to court, corporate claimant representatives need good preparation, case law, strong nerves, and “thick skin” to stand up and fight for every dollar. Anything less than a 100-percent commitment results in poor recoveries.
Dealing with adversity is standard operating procedure when subrogating. Many individuals are either up for the challenge every day or they are not. Competent collectors find ways to stand their ground against unprofessional insurers or the company insurance manager who does not want to pay because the company was shorted on the last claim. Effective collectors also communicate directly with underinsured or uninsured motorists to let them know their negligence won’t compromise the claimant demand or integrity.
While arbitration is a choice over litigation, other options exist. Good collectors know them and use them; others simply take the easy way out, all at the cost of the claimant.