When crashes occur, fixing the bent-metal is relatively easy and low-cost.  Just as the human cost can be significant, so too can the hidden costs.

In a recent Fleet News article, several UK industry experts shared their views on the true cost of collsions:
* Paying the cost of vehicle repair or insurance excess is just the tip of the iceberg
* Below the surface costs include losing key personnel to injury or ill-health, loss of business, potential loss of reputation and the expense of hiring replacement vehicles while company cars or vans are off the road
* “One of the challenges is that many of these figures never appear on a balance sheet,” says Andy Price, director of consultancy Fleet Safety Management, adding that “all the CFO sees is the insurance cost and maybe the cost of the excess. They don’t see that the employee was absent for seven hours trying to sort the issue out with the leasing company, or worse that they are off injured as a result of the collision"
* While the true cost can be many multiples of the insured cost, even a more believeable 2X rule of thumb can be an eye-opener
* Andy Price also uses another technique: he calculates how much revenue a company with an average claim cost of £1,000 would have to make to pay for its collisions. If that company has a claim frequency of 25% and profitability of 10%, every vehicle on the fleet – not just those involved in a collision – has to generate £5,000 of revenue to fund the uninsured losses associated with the collisions it is having
* Minimising the cost of crashes can start with vehicle selection. Cars or vans fitted with advanced driver assistance systems (ADAS) such as blindspot warning and parking assistance will reduce the likelihood of being involved in a collision, with Thatcham Research saying that autonomous emergency braking (AEB) can reduce the frequency of front and rear crashes by 40%
* But the technology also increases the cost of repair. As well as the expense of the equipment, the work becomes more involved than before
* The Association of British Insurers says the average cost of a car repair bill has risen 32% over the past three years to £1,678, and, while ADAS may not account for the entire increase, it is definitely a major contributor
* Thatcham estimates ADAS technology is currently fitted to around 6% of vehicles on UK roads and expects this to increase to around 40% by 2020, meaning that while, in theory, fewer cars will be in accidents, the costs when they do will rise
* “Once you’ve been involved in a collision, there is a whole industry out there trying to make money from that incident,” added Price. The speed of response after a crash is critical to minimising this cost. Delays in reporting the incident to an insurer or incident management company drastically reduces the opportunity to capture and control the third party costs, such as excessive replacement vehicle costs
* In terms of the human cost, a driver’s well-being should also be considered. Clare Cain, group insurance/risk manager at Kelly Communications, says: “You have to offer support following a collision, not just to improve the driver’s skills, but also to ensure they aren’t suffering from stress or depression"
* Colin Hartley, managing director of risk consultancy Driive, adds that the “ripple effect” means the impact of an incident goes far beyond the driver.

Source: Fleet News - What is the True Cost of a Collision - 24th April 2018