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American Towman Magazine Presents the Week in TowingFebruary 20 - February 26, 2019

Downtime for Wrecked Trucks

131 a3a27By Randall C. Resch

Tow companies that've been around awhile likely have experienced one of their trucks or carriers being struck by others. When someone else causes an accident, it creates a world of headaches and hassles with the other party's insurance carrier.

Insurance companies are famous for playing dodgeball when it comes time to handle your claim. When the other party is at-fault, your downed tow truck simply isn't their priority and you'll be at the mercy of the other party's claims agent.

Thankful that you or your driver wasn't injured in the crash, having one of your wreckers or carriers severely damaged brings five questions to mind:

1) How long will the truck be down for repairs?
2) Will you lose customers due to its loss of use?
3) Can you rent a loaner truck right away?
4) What's the approximate cost per day allowance I can recover for each day my truck sits in repair?
5) Will the truck be fixed or salvaged?

What's Your Proof?

The claim process is much more complicated than face value. For companies to claim accurate reimbursement, it has to prove what their truck's earnings average is as it relates to per-day earnings. Don't expect the other party's insurance to pay the single highest earning day you worked during some snow day emergency for the highway patrol. Instead, compare a similar period of six months by averaging per-day earnings.

Proof of daily earnings comes from dispatch records, fuel costs, tax payments, bank statements or whatever other documentation you're able to muster to prove consistent activity of recorded call response. Another bit of helpful data includes five years of past data for the same month in which the accident occurred.

Today's modern dispatch software programs are most valuable in providing "per truck accounting" for work accomplished in a specific reporting period. Be sure to include all work performed by the damaged truck if your business is a 24/7 operation, and emphasize that your business isn't a "Monday-Friday only" operation if that's the case.

Rent Another Truck?

There aren't too many available resources that rent tow trucks or carriers for short-time use. Even though you could successfully locate a rental truck, typically they aren't acceptable for law enforcement or government contracts where agency-approved permits and ownership becomes questionable. Rented trucks are different than one that are leased; and if they're not contractually permitted to respond to rotation calls, that limits the truck's daily earning potential.

I won't guess a solid per day figure; it's all based on the accident's repair claim and your company's per day accounting. From my research, insurance companies reluctantly agree on approximate reimbursement costs typically differing from $300 to $600 per day. This amount reflects an approximate amount it would cost per day to rent a like-size tow truck or carrier.

Rental rates estimated herein have nothing to do with the cost of repairs to your tow truck or other settlement conditions. If tow truck or carrier repairs exceed reasonable value, the process of salvage becomes another level of negotiation.

Stand Your Ground

Having a tow truck or carrier hit simply means you're in for a fight. Question five brings the hard consideration of repairing the truck or accepting the insurance company's decision that it's totaled. Tow trucks must be repaired with 100-percent accuracy to make them workable again.

You can also consider purchasing the wrecked tow truck after a settlement is agreed upon if there's possibility of rebuilding the truck or using spare parts. Unless the truck is new or only a couple of years old, body components aren't typically replaced with brand-new parts.

No matter what the consideration, stand strong in your negotiations with the insurance process. I think it's smart to estimate your cost-per-day accounting before an accident occurs. Savvy tow owners know that it's only a matter of time before one of their trucks gets plowed. Make your cost per-day compilation a rainy-day project, or assign it to your company's operations or office manager.

If negotiations take too long, or, the other party's insurance offers you the short-end of the proverbial stick, perhaps it's time to consult your attorney

Randall Resch is American Towman's and Tow Industry Week's Operations Editor, a former California police officer, tow business owner and retired civilian off-road instructor for Navy Special Warfare. Randall is an approved instructor for towers serving the California Highway Patrol's rotation contract. His course is approved by the California law enforcement community. He has written over 500 industry-related articles for print and on-line, and is a member of the International Towing & Recovery Hall of Fame.
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