In the auto damage appraisal world there are two schools of thought when it comes to outsourcing field work. Some insurers work with larger or national type firms to obtain bigger regions of coverage while others enjoy using a multitude of small individual appraisers. The general assertion one hears from Claims Managers who use small “mom and pop” operations is that they can exert more  ”control” over them. In all actuality, this is naive in thinking as no insurer can provide the variety of volume to an individual appraiser that a National IA firm can as most insurers only provide overflow work in many regions. The reality is that a Claims Manager who uses multiple small firms ends up with an inconsistent work product, no way to drill down on metrics and ultimately slower overall cycle times. By using a national firm who has proven track record of exemplary service and leading technology, an insurer gets the personal attention of an assigned account manager, quality control auditing, report analytics and a consistent product. The benefits of using a professional team that can deliver consistent metrics and results outweighs the “warm fuzzy” home grown feeling of using a small mom and pop type firm.

Also in a tough economy there have been stories of unethical Claims Managers who exert “control” through squeezing the “mom and pop” operations in the form of kickbacks and payoffs. A Claims Manager will assemble a large vendor panel of various small appraisal firms and the one’s who are willing to pay-to-play get the work. Desperate smaller appraisal firms are either forced to give in or lose the business. This under the table money flows right into the Claims Manager’s pocket. There have been cases in which claims managers received kick backs and have been fired in various parts of the country

Good advice to any Claims Executives who have Regional Claims Managers bent on using only small firms,  you might want to dig a little deeper to see what lies beneath.