Third-party administrators (TPAs) play an important role in the claims process. While insurance companies have traditionally handled claims, there is a growing trend as more insurers are
utilizing TPAs to manage claims on their behalf in an effort to reduce
expenses and increase profitability.
TPAs can assist with ensuring that damage appraisals are completed accurately
and on time, provide expertise on federal
and local regulations, and help streamline
processes for insurers and policyholders.
Many TPAs utilize independent appraisers
throughout the claims process to complete
insurance estimates on their behalf. A recent study found that TPAs are twice as
likely to outsource all of their appraisals to
independent appraisers when compared
to insurance companies, fleet owners/op-erators, leasing companies, remarketing
companies and self-insured companies.
Whether an insurer is working with
a TPA, or the TPA is using independent
appraisers, effective oversight is critical to successfully managing the claims
process for all parties involved. When
it comes to choosing an independent
appraiser, there are a number of factors
TPAs should consider to find the best
company that will complement their
needs and work environment.
Research shows that TPAs view accuracy
Material damage experts
as the top metric when evaluating inde-
pendent appraisers. When you step back
and evaluate the relationship between the
two groups, it only makes sense. Indepen-
dent appraisers are the TPAs’ eyes and ears
for estimates. TPAs rely on independent
appraisers to advise them on claims –
making estimate accuracy critical.
When working with independent appraisal companies, TPAs should look for providers with expertise in the various types
of claims they will be handling. Independent appraisers should be experts with
years of experience in completing claims,
and have references from other companies.
Reports should provide clear documentation of what occurred during the appraisal
process, what repairs are suggested, and
address any specific details or anomalies,
leaving no questions unanswered.
An independent appraisal organization
with a large geographic footprint can fre-
quently provide a global perspective of
business on a state-by-state basis. There
should also be consistency with estimate re-
ports so they provide the same information
regardless of location, since this increases
trust and produces more consistent results.
Time is of the essence in the insurance industry and independent appraisers need
to complete claims in a timely manner.
Research found cycle time was the second most important metric in the evaluation of independent appraisers by TPAs.
The industry standard for turnaround
time is 24 hours to make initial contact
with the customer, 48 hours to inspect
the damage and 72 hours to complete the
estimate. Look for an appraisal company
who can meet or exceed those standards.
Independent appraisers should use the
most recent technology available to complete estimates. Does the company use a
smartphone estimating tool? Is there a
way for clients to login and view real-time
updates on their claims? State-of-the-art
technology is a driving factor that affects
cycle time, accuracy and efficiency. Without it, the claims process may suffer.
Finding the right partner for any relationship is critical, and because TPAs are
relying on independent appraisal companies to provide the best, most accurate
results possible, choosing the right one is
vital to everyone’s long-term success.
Ken Loose is the COO at Property
Damage Appraisers. He brings over
25 years of multi-line claims and claim
management experience to PDA. Loose is
responsible for the day-to-day leadership
and general management of PDA. He is
accountable for process and workflow,
metrics reporting, client satisfaction and
the quality and calibration of PDA’s captive
franchise network, delivering a robust
menu of appraisal services. Ken can be
reached at email@example.com.
Hiring an independent appraiser?
Here’s what to look for