More Floods


In the Water Damage Restoration industry, there is a fair amount of debate about the usefulness of third party administrators. Some love the convenience of the referrals these organizations send their way while others get frustrated by the quality of the jobs they secure through TPAs.

A third party administrator works in partnership with insurance carriers. They manage claims with goal of keeping prices affordable and handle anywhere from 10 to 30% of insured restoration losses.

There’s no doubt about it, third party administrators are not the ideal source of referrals. That doesn’t mean we’re suggesting giving up on this source of work altogether. Instead, we have a few ideas for how to turn a relationship with a TPA into a profitable source of referrals.

The Downsides of Working With Third Party Administrators

What are the downsides of working with a TPA and do they really negate the benefits? By far, the best part of a TPA is that the referrals are sent your way automatically, without marketing of any kind.

Outside of that, this source of work does come with a major challenge — securing work using a TPA requires agreeing to following their pricing and terms. This can mean charging 30 to 40% less for work than you normally would.

As a result, many small business owners who rely too heavily on TPAs for referrals will find themselves facing cash flow issues. They may have plenty of work, but they’re not walking away from jobs with enough profit to grow their business. For a business owner, the only thing worse than being slow and broke is being busy and broke!

Tips for Working With Third Party Administrators

We’re not going to tell you not to work with TPAs. We do believe it is helpful to have a source of referrals you can always count on. That being said, you have to be smart about these referral relationships to keep your business profitable.

The first, and perhaps most important, piece of advice we can offer is to avoid becoming too dependent on TPAs. They should only be one source of income for your company, with referrals from plumbing contractors and insurance agents taking the lead.

We also highly suggest getting the inside scoop on a TPA before you begin working with them. Ask around in the industry. Find out what other restoration specialists have experienced while working with a specific service.

Lastly, don’t start working with a TPA unless you fully understand what is expected of your company. These services are typically pretty serious about requiring contractors to comply with a specific timeline and set of standards. Prepare your team to meet those expectations before beginning to accept leads sent your way.


At More Floods, we offer our members more than just marketing materials. We also share operational resources with them that help them with tasks like working with a third party administrator. Our members also have access to tools that help them lead their team well, enabling them to efficiently manage each job they take on. To learn more about joining More Floods, click here or call 1-866-667-3356.

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