Question
Last Friday, 5/3/02 we were parked at the shipping dock and another truck attempted to back in next to us. Unfortunately, he hit our truck. We are Owner/Operators and we were able to get the truck home and into the shop on Monday, 5/5/02. Sent the estimates to the other insurance company on Wednesday, 5/7/02. We still do not have the ok to have the truck fixed. Does this seem like a long time or are we just being impatient? They are now wanting us to rent a truck through the carrier we are leased to. They will pay $125.00 a day. From what we have learned, a truck costs $104.00 plus about $.15 a mile. If you do 650 miles a day, that is an extra $97.50 out of our pocket. Are we wrong to assume that the $97.50 would be coming out of our pocket? Also, how do you figure your lost earning capacity? We would appreciate your help.
Thanks.
Fran and Tom
Answer
In my experience, some insurance companies will only pay what it will cost to rent a truck for down time. I have had some difficulty with insurance companies in the past and have had to turn it over to my insurance company and let them collect from the responsible party. You will have to fork out the deductible required by your policy, but it will be returned, once the claim is settled. I had one case that took 3 years to collect on, and I ended up not getting any down time. Insurance companies have the resources (and lawyers) to get the job done.
As far as down time, I would figure how many days it takes to fix the truck. Take the amount you would earn in that time and subtract any money you would spend on fuel, tires (2-3 cents a mile), maintenance (4-5 cents a mile), and any other fixed costs that would not be incurred by running the truck. That would give you a "fair" amount to charge the insurance company.
Good luck.
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Answer
You should still get $125 a day down time for your truck. Pressure them about getting the OK for truck repairs. If renting is more expensive just explain that renting is not an option. You can try for a higher downtime rate but that rarely works. I hope the company that hit you is reputable and will settle in a speedy and fair fashion
Answer
Renting can be expensive. Many motor carriers do not want to provide the permits, lease paperwork etc for a short term.
Keep good records and prepare your downtime claim. Keep in mind that the downtime is only for the period of time the truck is not driveable as it is in the shop.
Trying to deal direct with the other carrier may prove tedious. If you have insurance, I recommend you contact your agent for their advice on the best way to handle this situation and minimize your expense and frustration.
Answer
Here is some information we give to our members regarding downtime claims. I hope this is helpful:
When you are satisfied with the repairs that have been made to your equipment, it is time to start downtime negotiations.
Downtime:
Gross revenue for the last 60, 60 or 90 days. You should have the trip sheets or other documents to back up your figures.
Variable cost – subtract the variable cost from the gross amount. Variable costs are things such as fuel, oil and living expenses.
Days ran – Using your logbook, determine the number of days you ran in the last 30, 60 or 90 days.
Formula –
1. Take the gross for the last 30, 60 or 90 days before the accident.
2. Subtract the variable cost.
3. Subtract 1.5% to 2% of the gross for maintenance.
4. Divide the sum of 1, 2 and 3 (gross, variable and maintenance) by the number of days you ran.
5. Amount will equal the dollar amount per day.
6. Multiply the per day amount by the number of days your equipment was in the shop for repairs to reach the total amount of downtime to claim.
Tips:
1. The day the truck goes into the shop, call three rental companies and ask to rent a truck. The first one that tells you they cannot rent to owner-operators, ask them to fax you their response.
2. If you are leased to a company, be sure to ask if you can use a rental truck under your signed lease until your equipment is repaired. If they say no, you will need that in writing also.
3. Never tell the other party you are broke or have payments due. They may slow the settlement process in hopes you will take less money if you need it now.
4. Never threaten the other party with legal action unless you are prepared to take that action. Once you mention court or attorney, all settlement talks will end.
5. Be prepared to wait 4 to 6 weeks after the repairs have been made to receive a final settlement regarding downtime.
6. Keep a record of all conversations; date, department, person you spoke with and context of call. Follow up phone conversations with a letter.
7. If the other party will not settle or will not negotiate in good faith, be prepared to contact the State Insurance Commission in your state, the state the accident occurred and the responsible parties’ state. You will also want to notify State and Federal DOT.
8. If the amount of downtime falls within the Small Claims’ Court limits in the state where the accident took place, you can proceed to Small Claims’ Court.
9. Last but not least, always conduct yourself in a businesslike manner.
Jim Johnston