In the long-running tug-of-war between insurers and public claims adjusters, Florida’s Citizens Property Insurance Corp. has thrown a curveball that may dramatically impact some adjusters’ incomes.
A public adjuster group is already weighing whether to mount a legal challenge.
“Nothing is off the table, and I can confirm that every avenue is being explored,” said Nancy Dominguez, managing director of the Florida Association of Public Insurance Adjusters (FAPIA).
She was referring to the association’s response to Citizens’ recent decision to stop naming public adjusters as co-payees on insurance claim payments.
“… Our policy requires us to pay the insured unless someone other than the insured, such as guardian or other loss payee, is legally entitled to the claims payment,” reads a June 4 draft letter from Citizens that will be sent to public adjusters questioning their sudden removal from settlement checks, marking a major shift from years of established procedure.
“Your right to payment is based on a public adjuster’s agreement that is between you and the insured and the insured is liable for the payment of parties with whom he or she contracts, not the insurer,” the Citizens letter explains.
Citizens’ Executive Leadership Team — made up of senior leaders at the state’s insurer of last resort — made the decision to change the policy, spokesperson Michael Peltier confirmed in an email.
“This procedural change makes it easier for our policyholders and does not impact any contract between a policyholder and their public adjuster, whose fees are governed by statute,” he noted.
He offered no explanation for why the change is happening now, after years of insurers raising concerns about public adjusters.
It’s not clear how many public adjusters could be affected, but the number may be substantial. Citizens, Florida’s largest property insurer with roughly 836,000 policies, handled over 42,000 claims in the first quarter of this year, after processing nearly 97,000 claims in the fourth quarter of 2024, state insurance data shows.
This isn’t Citizens’ first shot. Dominguez said the insurer has also recently informed public adjusters that its representatives will no longer deal with them directly, opting instead to communicate only with policyholders. She called it a clear attempt to shut public adjusters out of the process, “despite a legally binding contract and statutory provisions that require insurers not to exclude public adjusters from the claim process.”
She and fellow public adjusters said they have not seen other Florida insurers or last-resort carriers in other states take comparable measures. Some states like Alabama only recognize public adjusters who are licensed attorneys, whereas most states, including Florida, allow licensed adjusters to operate under rules regulating fees, solicitation hours, and related matters.
After Hurricane Andrew struck Florida in 1992, public adjusters rose to prominence amid a flood of insurance claims. The high demand for claims services drew many adjusters into the state, as explained on FAPIA’s website.
Numerous insurers and some public officials, including Florida’s former CFO who is now a Congressman, have consistently condemned public adjusters for aggressively pursuing storm claims and occasionally inflating their value, sparking more legal disputes.
“We have bad public adjusters swarming impacted areas, soliciting, and trying to make a quick buck,” Patronis said in 2022 after Hurricane Ian hit the state. “Not only do individuals need more time to get out of a public adjuster contract during a state of emergency, we need to reduce the percentage a public adjuster is entitled to immediately following a storm, ensuring their motives are aligned with helping Floridians get back on their feet.”
Public adjusters argue that they offer property owners a valuable second opinion when insurers’ adjusters lowball claim amounts.
Up until now, most Florida insurers, Citizens included, named public adjusters as co-payees. Adjusters often had to navigate a cumbersome process to collect signatures or electronic authorizations from homeowners, and sometimes mortgage companies and contractors, said Shaun Markwardt, a public adjuster from Tennessee who has worked on Florida claims.
He noted that listing only the insured on the check, while making them responsible for paying the adjuster, is bound to lead to conflicts.
“You’re opening up the homeowner to a lot of liability if they don’t pay the adjuster,” Markwardt said.
Dominguez agreed, warning that Citizens’ new policy could harm both policyholders and licensed public adjusters. “There is no need to create further disputes in the insurance claim process,” she said.
Markwardt warned that other insurers and states could follow Citizens’ example if the policy holds up in court. “Florida and Texas tend to set precedent for other states, and Florida has shown that it is not friendly to policyholders,” he said.
The South Florida Sun Sentinel, which originally broke the story on Citizens’ policy shift, warns that many public adjusters may steer clear of Florida if other insurers follow Citizens’ lead.
Dominguez said that was probably the goal.
The step is among multiple efforts by Citizens and other Florida insurers to curb rising claim costs as litigation surged to what insurers called excessive levels before legislative changes from 2019 to 2023. In 2022, Citizens began offering policy endorsements that send claim disputes to a state agency for resolution.
Several carriers have implemented endorsements requiring binding arbitration rather than court battles in claims disputes, as well as limits on roof age. Roof claims are among the most frequent in Florida, and some insurers accuse “bad-actor” public adjusters of working with roofing contractors to inflate damages and claims.
