Complex Warranty Claim Processing Drives 3rd Party Growth

A recent study by WarrCloud shows the cost of processing new auto warranty claims increased by 28% since 2020. Processing a single claim now takes 47% more time, with dealerships seeing a 17% rise in claim volume. Factors like advanced vehicle technology and a rise in vehicle recalls are driving up these costs. Additionally, EV warranty work is also expected to grow in service departments, accelerating the need for warranty administrators to create new strategies to deal with more complex warranty work and claims, according to an article by Automotive News. In response to these factors, many dealerships are outsourcing claim processing to manage the growing expense and complexity, with predictions that these challenges will persist into 2025 and beyond.

Claim processing companies, specializing in efficient claim management, can capitalize on the surge in demand. As more advanced technologies and frequent recalls drive up claim volumes and processing times, warranty processors can offer value-added services to streamline operations. Long-term, this trend may lead to growth and expansion opportunities for these claim processors as well as administrators who would benefit from a more efficient claims process and better customer satisfaction.