From campervans hitting car park barriers and stolen cars smashing into street signs, to mopeds damaging pedestrian guard rails and drivers tail-ending a bin lorry, the volume of council-owned property and vehicles means assets are damaged on an almost daily basis.
While it is usual for local authorities to be insured for any liabilities, in a lot of cases, there is no or limited insurance for their own losses in relation to property and vehicle damage.
If damage was caused by others – usually vehicle users – losses can, in fact, be recovered. While some incidents may seem minor, repairing and replacing property and vehicles can end up being costly, especially when associated losses are included. Uninsured loss recovery (ULR) is can be overlooked by councils, possibly because they are unaware the opportunity exists or are fearful of ULR costs. Our research found that this has resulted in millions of pounds’ worth of unclaimed losses reach year, which can be reinvested back into the local community.
With continuing budget costs, councils are looking to claw back as much cash as they possibly can and ULR is one way to do this.
Underutilised solution
ULR is the process of recapturing costs and expenses you may have incurred if your property or vehicle was involved in an incident that was not the fault of you or your employees. Depending on your insurance policy, these losses may be ‘uninsured’ and if not covered, can include repairs, policy excess and, in the example of vehicle damage, loss of use.
In our experience, ULR does not always get the attention it deserves among the public sector; local authorities may not have recovery agents appointed and sometimes, the task is an add-on to a council employee’s day job, meaning the returns are generally lower than they could be. In fact, our research revealed that approximately one in 14 local authorities are not using ULR at all.
To counter third-party insurer challenges and maximise recoveries in the shortest time possible, it is also necessary to issue court proceedings on many claims. The right ULR provider will be able to handle this as part of their basic service package.
Making a claim
Any kind of repair needs to be dealt with quickly to make sure there are no health and safety risks to the public or to ensure a vehicle is back on the road as soon as possible. With this in mind, the local authorities we work with have quite detailed and evolved processes in terms of getting damage repaired.
Once a repair has been facilitated, a council or its appointed facilities/repair management provider can flag recoverable matters for submission to their chosen ULR provider. While any potential claimant has six years from the date the incident occurred in terms of the limitation period to pursue a claim, we recommend this typically happens as soon as possible post incident to maximise cash flow.
While evidence can be gathered after the event, the preference is to have all processes embedded in advance of any potential claims to ensure the correct information is collated at the time, rather than retrospectively, which can hamper recovery opportunities.
An average settlement time of 26 weeks can be significantly affected, positively or negatively, by the availability of documentation and evidence. While, ultimately, it is usually insurers that pay claims, the people causing damage are largely local residents, so it is vital councils ensure their chosen ULR provider can handle reputational factors in their process.
Utilising ULR
To begin with, local authorities should reflect on their internal procedures and policies to ensure they know what to do if one of their properties is involved in an accident that was not their fault. To secure a successful recovery, councils should collate the name, address, phone number and vehicle registration of the person who caused the damage, as well as details of what happened, at the time of the incident. Police and witness details – again, names, addresses and phone numbers – will also help a claim. Trying to chase people, witnesses and police for information afterwards can be less productive. Images or video footage, if possible, of the vehicle in situ as well as the damage caused will always help a claim. CCTV footage can be erased after 30 days so ensure it is downloaded and stored securely. The impact of failing to do these basics can cost your council significant sums of money.
Claims submitted will, of course, be subject to scrutiny and insurers will ask for documentation. The lack of documentation does not mean you cannot recover a particular loss but the better evidenced the claim is, the better your prospects. Many local authorities focus their attention on claims against the council, but with a proper ULR solution in place – which is often on a commission basis and only payable at the conclusion of a successful recovery – local authorities could maximise their loss recovery with no upfront fees and reinvest these funds into services in their local areas.
Ian Evans is partner at Corclaim
