Help with Citizens Property Insurance Claims

Understanding Citizens Insurance Claims

In a reversal of a law that was enacted in 2011, the Florida legislature has now given Florida public adjusters the full ability to help Citizens policyholders with their insurance claims when help is needed most, which is during the earliest stages of the claim when mistakes can cause settlement issues and denials. Many policyholders contact us because they find dealing with Citizens in their attempts to resolve their insurance claim is often a very arduous and extremely time consuming process.  This is the main reason why many turn to public adjusters for professional assistance.

Unlike all other private insurance carriers in Florida, public adjusters were prohibited from collecting any fees until an initial offer was made by Citizens and then could only charge 10% of the new money generated above the initial offer. This wasted time, promoted gamesmanship by Citizen Adjusters, made it uneconomical for public adjusters to invest their time and promoted more expensive litigation. The law also discriminated against Citizens policyholders who felt they needed professional help and representation with their claims; exactly why the State created public adjusters.

Under the new law enacted in SB1770, public adjusters can charge up to 10% for any initial claims made in the first year and up to 20% for claims made in subsequent years. The 20% fee will also apply to all reopened and supplemental claims. The law also prohibits public adjusters from receiving compensation from any source over the new statutory fee schedule. Public adjusters also must meet with the insurer and try to settle the claim as opposed to refusing to meet the insurer and forcing the claim into court. In addition, Public adjusters also are prohibited from acquiring any interest in a totaled property unless a policyholder agrees.

We would encourage Citizens policyholders to confer with a public adjuster to determine if their claim warrants assistance.

Will you receive a fair offer?

It’s hard to say. Every claim is different and has its own set of circumstances. What we do know is that insurance policies contain many grey areas open to interpretation that can impact the value of your settlement. The most important thing is to understand what your claim is really worth before you receive an offer from the insurance company. Changes in the way Citizens estimates and reimburses policyholders can greatly impact your initial and final settlement. You can learn more about this by reading a recent article we wrote on Depreciation / Holdback RCV vs. ACV.  

Background & Analysis: Understanding Citizens Insurance Claims

Citizens Property Insurance Corporation was created in 2002 by the Florida state government to provide property insurance for homeowners who could not obtain insurance elsewhere. It is a government-owned insurer of last resort that has become the largest homeowner insurer in the state with over 1.4 million policies in force as of August 31, 2011. If a large storm endangers the financial viability of Citizens, they have the power to raise rates for policyholders by more than 40 percent and assess residents covered by other insurance companies up to 16 percent greater than their current premium in order to recoup their losses. These financial issues have caused Citizens and the legislature to make ongoing changes to homeowners’ policies, certain coverage’s and how policyholders are reimbursed.

The Citizens Property Insurance Corporation is unquestionably the largest insurance company in the State of Florida.  The company is also owned and run by the Florida State Government, which allows it to handle insurance claims differently than those of private carriers who are closely monitored and required to abide by the rules and regulations set forth by the Florida Department of Insurance. 

In 2011, the Florida Legislature set out to create laws preventing Citizens policyholders from retaining the services of a public insurance adjuster for the most part due to a 2010 study conducted by OPPAGA, where the Florida state agency found that Citizens policyholders with public adjuster representation received appreciably higher compensation on average than those who may not have been aware of their rights to hire a public adjuster.  Specifically, the Office of Program Policy Analysis & Government Accountability (OPPAGA) found that Citizens policyholders with public adjuster representation resulted in payments that were 747% higher in catastrophe claims and 574% more in non-catastrophe claims.  To be “fair and balanced,” we should also point out that the public adjuster represented claims also took longer to reach final settlement (132 to 296 days longer than claims without public adjuster representation depending if they were new or reopened claims.)  This statistic is no surprise given the time element needed to “negotiate” with Citizens for more money. But the fact remains that the OPAGGA study provides a detailed accounting of how much money Citizens policyholders may be leaving on the table. 

The OPAGGA study also fueled the fire for State Lawmakers influenced by the insurance lobby to limit the role of public adjusters in helping policyholders.  In 2011, a new law strictly limiting the ability of how a public adjuster could represent a Citizens policyholder was passed.  This created an unfair disadvantage for those who sought to engage a public adjuster at the onset of a claim, leaving many without a knowledgeable advocate to represent their best interests. This caused much undue hardship especially after the passing of Tropical Storm Debby in 2012.  During this time, our firm was contacted by numerous Citizens Policyholders seeking assistance that we simply could not provide by not being able to cover costs for time, estimating expenses, filing or managing the claim during the initial stages of the claims process when much of the best assistance and advice is needed the most. 

The new law created unintentional consequences as many policyholders seeking professional services for insurance claim help had no choice but to hire an attorney which according to a Citizens report extended the life of the average claim, increased claim costs, and caused tremendous litigation costs for Citizens far beyond any cost or data related to public adjuster involvement. Suddenly State Lawmakers realized Citizens had a better deal working with public adjusters rather than working against them. 

The injustice to Citizens policyholders was undone during the 2013 legislative session when lawmakers changed the law yet again approving a provision allowing public adjuster’s to assist a Citizens policyholder at the onset of a claim.  Ultimately, we feel this decision is a step in the right direction, which will allow those seeking professional assistance with their insurance claim to obtain the full benefits which they are entitled, especially in the wake of a disaster when resources and adjuster experience is needed the most.

Tutwiler & Associates continues its dedication to helping policyholders, regardless of who covers their property or what obstacles are in the way.  We encourage you to contact us when you experience a property loss and have a claim and also invite you to read the Citizens Claim FAQ linked to this page to learn more details of why it makes sense to engage professional claim representation by a public insurance adjuster.

Please visit our Success Stories page to see examples of Citizens losses we have settled.

Contact a public adjuster from Tutwiler & Associates if you have a question or would like a free consultation about a explosion insurance claim. Or call 1.800.321.4488