The cost of purchasing new or used equipment and replacement parts has skyrocketed in recent years; the rise in cost means it is more expensive to replace and repair equipment that is involved in a claim. For example, imagine you own a trailer today that was purchased three years ago for $40,000. Your insurance policy may indicate this trailer is insured with a policy limit of $40,000. If that trailer is totaled in an accident tomorrow, you will be paid the value of your equipment based upon what the market is. In this case, since the trailer is three years old, the value would be lower, such as $30,000, or its actual cash value.
Since, the actual cash value is $30,000, and the policy limit is $40,000, the insurance policy will pay only $30,000 for the damaged trailer. Also, if the value of the trailer is $45,000 actual cash value, the policy will pay only up to the limit of insurance listed on the policy. The risk of under-insuring equipment is that you won’t have proper values in order to be paid market value for your equipment
This out-of-pocket expense could negatively impact your profits. Make sure you review your policy limits regularly to ensure the values listed for equipment are accurate.
On-time reporting of physical damage claims allows Great West Casualty Company to begin the investigative process while all of the details are still fresh in the minds of those involved. Prompt claim reporting is important for several reasons, including downtime and claim processing.
If the physical damage cargo (PDC) adjuster can respond in the first 24 hours, they can take steps immediately to minimize the insured’s downtime, assist with towing, and get the equipment back on the road more quickly.
Additionally, on-time reporting can affect the severity of a claim. Great West’s PDC adjusters work with wrecker services and body shops every day. They specialize in resolving claims promptly to minimize losses and reach a fair and accurate settlement.
Consider the timeliness of reporting a claim involving perishable commodities. If you wait to call Great West for a day or so to give the receiver a chance to decide what they're going to do, you could limit or prevent our ability to show that the cargo is not damaged or to mitigate a loss. In some situations, timely reporting can help prevent a loss.
Also, you are obligated under the terms of your policy to timely report claims. For motor carriers who transport building materials, coils, paper rolls, dry goods, chemicals, food products, ingredients, and livestock, the PDC adjuster can, in most cases, assist with salvaging these types of cargo to mitigate the loss when legally permissible.
Great West also employs the services of independent adjusters to inspect the cargo, assist with the investigation, and help control costs. Again, reporting the claim promptly allows the claims team to resolve the claim quickly and fairly.
Train drivers and operations staff on how to promptly report a claim.
Review your insurance policies regularly and ensure all equipment values are accurate.
Ensure each tractor has an accident kit.
Note: These lists are not intended to be all-inclusive
This material is intended to be a broad overview of the subject matter and is provided for informational purposes only. Joe Morten & Son, Inc. does not provide legal advice to its insureds or other parties, nor does it advise insureds or other parties on employment-related issues, therefore the subject matter is not intended to serve as legal or employment advice for any issue(s) that may arise in the operations of its insureds or other parties. Legal advice should always be sought from legal counsel. Joe Morten & Son, Inc. shall have neither liability nor responsibility to any person or entity with respect to any loss, action, or inaction alleged to be caused directly or indirectly as a result of the information contained herein. Reprinted with permission from Great West Casualty Company.