EDITORIAL: Insurance adjusters may be left out of settlements

Florida's messy insurance situation could get messier for policyholders.

Citizens Public Insurance Corp. (the state-run insurer of last resort for Florida homeowners who can't find private coverage) has announced it will no longer include public adjusters in payout checks to policyholders.

Public adjusters, like attorneys, represent homeowners as they work with insurance companies on claims, including those after hurricanes and tropical storms.

Citizens was created in 2002 after a number of private insurers pulled out of the Florida market due to high claims costs from hurricanes.

"Our policy requires us to pay the insured unless someone other than the insured, such as a guardian or other loss payer, is legally entitled to the claims payment," the letter reads, according to the Sun-Sentinel newspaper.

Public adjusters will have to get paid from policyholders rather than having their fees included in insurance payouts from Citizens.

Other private insurance companies could follow suit.

That worries the Florida Association of Public Insurance Adjusters.

The industry group contends the payment changes could result in fewer adjusters working in Florida, leaving fewer advocates for homeowners as they deal with insurance companies.

"If public adjusters find it difficult to get paid for their work since their fees are not being protected, it is likely they will leave the industry," Nancy Dominguez, executive director of the Florida adjusters group, told the Sun-Sentinel. "This will make it much more difficult for policyholders to get a second opinion, find professionals to help and get fairly paid for their losses. I suspect that is the intended consequence."

The Citizens' policy leaves it to policyholders to pay the adjusters, which can have its own complications as opposed to rolling those payments into insurance claims payouts.

Adjusters get paid contingency fees related to insurance settlements. The most they can charge in Florida is 20%, according to the industry group.

For emergency events such as hurricanes, the contingency cap is 10% for claims filed within the first year.

Adjusters tend to get higher payouts from insurance companies than individual policyholders.

Sometimes, they get significantly more money from insurance firms.

There's the rub with the Citizens move.

Insurance companies goals are to stay solvent and make money.

Adjusters and attorneys getting more money out of them goes against those goals.

That's been one of the challenges in Tallahassee as Florida continues to see high costs for homeowners and car insurance including from bigger and more destructive hurricanes and tropical storms.

The debate and action items seem to often be about the interests of the insurance industry (a Republican constituency) versus those of plaintiffs attorneys (a Democratic constituency) and now adjusters.

Of course, the latter groups' goals are also to make money off of insurance claims.

Lost in the mix too often are policyholders. That includes homeowners, small businesses and nonprofits.

Who's representing them? Who's looking out for them?

Too often, it feels like the Republicans in charge in Tallahassee are carrying water for the insurance industry.

In the other camp, Democrats talk about helping property owners but their campaign contributions also show big money from plaintiffs attorneys, whose legal actions are part of Florida's high insurance costs.

There isn't a lot of trust in the insurance industry locally or statewide with carriers retreating from Florida and slow or low paying policyholders after big hurricanes.

Citizens' adjusters action seems to be another page in that low-pay, slow-pay playbook.