Who should handle your claims?
November 08
A discussion on who should handle a utilities companies’ damage expense claims
Presented by John Visi ––– Full Text Available Here
In-House Utility Claim Organizations
A utility’s core work is providing or delivering utility products and services to their customers and to achieve a profit.
An in-house claim organization’s core work product is facilitating a 100% recovery of expenditures incurred for damage repairs
on owned facilities to the respective outside plant budget. The claims organization’s primary focus should be recovering 100%
of dollars spent on damage repairs. To be effective, an in-house claim organization goals and objectives should also be related
and correspond to the outside plant goals and objectives.
... more ...
Outside Vender Utility Claim Companies
A collection vendor’s core work is collecting money to achieve a profit. A collection vendor’s core work product is on collecting
fee dollars on multiple client claims. Their primary focus is to collect a fee on every claim worked. A collection vendor’s goals
and objectives are related and correspond to collection performance. Their employee work force is motivated by monetary incentives,
rewards, and continued employment. The time frame to collect is dependant on the quickness to achieve settlements and collect fees
and move on to the next claim, similar to a production first environment. A collection vendor is most effective on high volume, low
dollar, non technical, in period claims, where the manpower is focused on collections for multiple clients. In contrast, a collection
vendor is least effective on high dollar, low volume claims where time, expert knowledge, and long term attention is required.
... more ...
Independent Contractor
An independent contractor’s core work is contracted to client damage claim expense recoveries. An independent contractor’s primary focus
is acting on behalf of the client to get the full recovery of a client’s claim for damage repair expenses. An independent contractor’s
goals and objectives are related and correspond to their client’s expectations on achieving a full expense recovery on each claim worked.
An independent contractor is motivated by monetary fees and continued employment by the client. The time frame to collect is dependant
on the ability to negotiate a full settlement before the statute date. Because of the extended time frame, an independent contractor is
most effective when handling high dollar, low volume, and out-of-period claims since these claims take a long time period to settle and
can dedicate the necessary time to handle them. In contrast, an independent contractor is least effective on high volume, low dollar
claims, due to sizeable manpower needed to facilitate, which in turn is not cost effective for either the client or the independent
contractor. It is important that the independent contractor have the necessary industry expertise and negotiation skills to address
liability issues and settlement concerns.
Conclusion
In conclusion, the choice between an in-house organization, an outside vendor organization, or an independent contractor, should be made
based first on the comparison of the true cost (including overhead) of employees versus the fees charged by an outside vendor or contractor
and second on performance in collecting 100% of the damage repair expenses. It is important to understand that who ever is facilitating the
damage claim recovery effort; there are four main objectives to achieve on every damage claim. The objectives are:
- 1. To determine proper demonstrable liability
- 2. To present a all-inclusive claim to the damaging party
- 3. Negotiate for 100% of the damage repair expenses
- 4. Avoid a costly legal action to collect
If these objectives are achieved, then the chosen organization or person to facilitate the damage claim recoveries was a good choice.