Expecting 100,000 Hurricane Irma claims, Citizens approves extra adjusters, rules waiver

Sept. 07--Expecting Hurricane Irma to generate 100,000 claims, Citizens Property Insurance Corp.'s governing board on Wednesday suspended normal contracting procedures so the company can pay more to hire additional claims adjusters.

With Irma projected to make landfall in South Florida sometime Sunday, Citizens is concerned about its ability to compete with private insurers here and in Texas for independent adjusters.

The company expects to begin deploying adjusters to evaluate Irma claims in Florida beginning Wednesday.

The emergency rules suspension enables Citizens to match or exceed other companies' offers, and also waive other requirements, including holding a Florida license.

Property insurers rely on the ability to summon independent adjusters after catastrophes, so they don't need to employ large numbers of people during normal periods.

Citizens, the second-largest property insurer in South Florida, has 262,000 policyholders in areas where hurricane-force winds are possible, said Jay Adams, chief of claims for Citizens', the state-run "insurer of last resort."

Industry experts say South Florida property owners should expect delays getting adjusters to their properties if widespread damage results.

"If folks have claims in Miami and they are insured by Citizens, I'd anticipate some delays," said Locke Burt, president of Security First Insurance Co. "There are only a finite number of field adjusters in the U.S."

Currently, adjusters are in extremely short supply, Citizens officials said. Many left the industry during the decade after 2005, when no hurricane made landfall in Florida.

Adjusters were also lured away from Florida to work on claims in areas impacted by Hurricane Harvey. Since Harvey struck Texas, 20 independent adjusters working for Citizens on non-storm-related claims quit to work on Harvey claims, Adams said.

Citizens has already adjusted its day rate from $625 to $750, but other companies are paying more, including Texas Windstorm Insurance Association, that state's insurer of last resort, which is paying $900 a day. Another Texas company raised its daily rate to $800 a day plus a $120 daily per diem, Adams said.

And State Farm reopened a catastrophe claims processing center in Jacksonville and asked for 300 claims adjusters, paying them at similar rates.

Adams said private market insurers in Florida are offering independent adjusters up to $1,400 a day for guaranteed post-storm availability. "They also are feeling the shortage of resources in the marketplace."

Peter J. Crosa, president of the National Association of Independent Insurance Adjusters, said he has heard of adjuster companies offering signing bonuses. "Everyone doesn't have the adjusters they need to have. There's a big shortage out there," he said.

Travis Miller, spokesman for Universal Property & Casualty, the largest property insurer in Florida, said Universal "does not anticipate any problems mobilizing the adjusters that are under contract" but he acknowledged that market costs for adjusters are increasing in anticipation of Irma.

Michal Brower, spokeswoman for State Farm, said the company doesn't discuss specifics of catastrophe contracts "for competitive reasons," but added, "we are prepared and ready to respond to large scale events requiring a huge claims response."

Citizens' emergency rules suspension is authorized under Gov. Rick Scott's declaration of a state of emergency Sunday for Florida. The declaration authorizes state agencies to suspend "any regulatory statute" that could hinder or delay necessary action in coping with the emergency.

Scott's order will be in effect for 30 days, but the governor can extend it 30 days at a time.

The emergency rules suspension by Citizens followed the governing board's approval of a contract securing services of 315 catastrophe adjusters from 10 companies to supplement 496 adjusters whose services were secured in a contract approved in April.

As Hurricane Harvey threatened the region last October, Citizens tried to activate 624 adjusters from companies contracted to provide up to 2,048. Only 279 adjusters responded, prompting the company to cancel contracts with those companies and solicit new proposals.

After Hurricane Wilma struck Florida in October, Citizens dispatched nearly 2,000 adjusters to respond to more than 123,000 claims as hundreds of homeowners complained about delays.

[email protected], 954-356-4071, twitter: twitter.com/ronhurtibise

___

(c)2017 the Sun Sentinel (Fort Lauderdale, Fla.)

Visit the Sun Sentinel (Fort Lauderdale, Fla.) at www.sun-sentinel.com

Distributed by Tribune Content Agency, LLC.