Third-party administrators (TPAs) play animportant role in the claims process. While insurance companieshave traditionally handled claims, there is a growing trend as moreinsurers are utilizing TPAs to manage claims on their behalf in aneffort to reduce expenses and increase profitability.

TPAs can assist with ensuring that damage appraisals arecompleted accurately and on time, provide expertise on federal andlocal regulations, and help streamline processes for insurers andpolicyholders. Many TPAs utilize independent appraisers throughout the claimsprocess to complete insurance estimates on their behalf. A recentstudy found that TPAs are twice as likely to outsource all of theirappraisals to independent appraisers when compared to insurancecompanies, fleet owners/operators, leasing companies, remarketingcompanies and self-insured companies.

Whether an insurer is working with a TPA, or the TPA is usingindependent appraisers, effective oversight iscritical to successfully managing the claims process for allparties involved. When it comes to choosing an independentappraiser, there are a number of factors TPAs should consider tofind the best company that will complement their needs and workenvironment.

Accuracy

Research shows that TPAs view accuracy as the top metric whenevaluating independent appraisers. When you step back and evaluatethe relationship between the two groups, it only makes sense.Independent appraisers are the TPAs' eyes and ears for estimates.TPAs rely on independent appraisers to advise them on claims –making estimate accuracy critical.

Material damage experts

When working with independent appraisal companies, TPAs shouldlook for providers with expertise in the various types of claimsthey will be handling. Independent appraisers should be expertswith years of experience in completing claims, and have referencesfrom other companies. Reports should provide clear documentation ofwhat occurred during the appraisal process, what repairs aresuggested, and address any specific details or anomalies, leavingno questions unanswered.

National company

An independent appraisal organization with a large geographicfootprint can frequently provide a global perspective of businesson a state-by-state basis. There should also be consistency withestimate reports so they provide the same information regardless oflocation, since this increases trust and produces more consistentresults.

Cycle time

Time is of the essence in the insurance industry and independentappraisers need to complete claims in a timely manner. Researchfound cycle time was the second most important metric in theevaluation of independent appraisers by TPAs.

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