In the United State there is a rail grade crossing accident on average every 4 hours that often result in railroad insurance claims. When the accident involves damage to railroad property the claimed damages often exceeds $100,000. If the damage is excessive or bodily injury is involved, then claims might go up into the millions of dollars.
Because railroads have a lot of experience with rail related accidents they have well established procedures to maximize the value they would like receive from the settlement. However, an investigation by experienced claims adjusters has shown that the initial claimed damages are often beyond the real damages suffered.
Only very rarely does the defending insurance company have the necessary experience with railway insurance claims to be able to negotiate a fair and equitable settlement. The result is that the defending insurance company will often end up significantly overpaying the actual damages.
There are five areas that are usually responsible for most railroad insurance claims.
- Equipment damage – If often turns out that claimed damages include pre-existing damage, damage that never gets repaired, cost of entire units when only a sub-assembly needed repair and even claims for equipment that turns to not have been damaged at all.
- Loss of use and train delays – The railroads will use a theoretical formula to claim a loss of business when in fact the actual loss is much smaller or even non-existent.
- Bodily injury – Claims for bodily injury by railroad workers are often in excess of $10 million dollars. Railroad employees have the best safety records of any non-office occupations and an experienced investigator will often determine that the accident was actually due to failure to follow procedures.
- Salvage values –Claims are made for the full value of equipment and cargo even though in most cases damaged equipment can be salvaged for parts or scrap metal and part or all of a cargo shipment will be accepted by the receiving party.
- Track repairs – Often the claims for track repair will include the cost of track upgrades not related to the accident plus the repairing company will recover significant value from the scrap metal.
Insurance companies need to make sure that claim settlements are fair to maintain profitability, to establish precedents for future claims and to make future settlements based on objective terms.
Very few insurance adjusters have the expertise to work on railroad insurance claims. An insurance company needs to seek out individuals with the combination of insurance claims adjusting as well as a working background in the railroad industry.
By working with the right adjuster an insurer can sometimes save hundreds of thousands of dollars on railroad related insurance claims.
Before you hire or assign an adjuster for your railroad insurance claims find out if they have the right combination of railroad and insurance experience to help you quickly and efficiently reach a fair and honest settlement and to help your company maintain profitability.