Our latest research has revealed that local authorities across England could be owed at least £9.3 million, from unclaimed costs due to property damage alone in the past five years. That’s not counting the even greater sums recoverable from council-owned vehicle damage.
In this article, our partner Ian Evans discusses what councils can do if their assets are damaged following an incident.
Property and vehicle damage
There is a large volume of council-owned property and vehicles that are damaged on an (almost) daily basis. And, 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 losses in relation to property and vehicle damage.
What many people don’t know, is if the 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. Uninsured loss recovery (ULR) is often overlooked by councils, possibly because they are unaware the opportunity exists or are hesitant about the costs involved.
Our research found that this has resulted in millions of pounds’ worth of unclaimed losses each year, which can be reinvested back into the local community.
Our mass freedom of information request to all 332 local authorities in England showed that between 2017 and 2022, an estimated £91 million was spent repairing council-owned property that had been damaged by vehicles in more than 171,000 incidents – 60% of which was not recovered through either insurance policies or uninsured loss recovery (ULR) methods.
Examples from our freedom of information request include campervans hitting car park barriers, stolen cars smashing into street signs and on-site contractors causing damage during works. ULR also applies to fleet vehicles, such as someone tail-ending a council-owned car or bumping into a bin lorry, as long as the negligent party or vehicle is identified. With continuing budget costs, councils are looking to claw back as much cash as they possibly can, and making use of ULR is one way to do this.”
Read more of Ian’s comments on this in LocalGov.
What is ULR?
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 1 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 ULR claim
The local authorities we work with have quite detailed and evolved processes in terms of getting vehicle or property damage repaired. Any kind of repair to vehicles or property needs to be dealt with quickly to make sure there are no health and safety risks to the public, and to ensure a vehicle is back on the road as soon as possible.
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.
Incorporating ULR going forwards
For starters, local authorities should evaluate their current internal policies and procedures, to make sure they know what to do if one of their properties or vehicles 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.
Councils should also try and obtain images or video footage, if possible, of the vehicle in situ as well as the damage caused. CCTV footage can be erased after 30 days, so make sure it is downloaded and stored securely before this deadline. Failing to do these basics can cost your council a significant amount of money.
Claims submitted will, of course, be subject to scrutiny and insurers will ask for documentation. A 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.
Get in touch with our ULR experts
If you wish to discuss any of the points above, please don’t hesitate to contact our team. You can call us free on 03300 945 100, or request a call back.