CITIZENS PA’s…Good for the Goose, Great for the Gander!

Did you know that SB-408, which passed during the 2011 session, provided assistance to Citizens policyholders, those with claims, by reducing the amount they would have to pay a public adjuster (PA)? It does this by limiting the fee to 10% of the difference between what Citizens originally offered and what the PA’s intervention might have actually helped the claimant receive.


FS 627.351(6)(a)6–For any claim filed under any policy of the corporation, a public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other thing of value greater than 10 percent of the additional amount actually paid over the amount that was originally offered by the corporation for any one claim.

Should be no surprise to hear this change is frowned upon by some in the PA community. I’m also told there’s a madcap search for ways to get around it.

Pat Cucarro, president of the Florida Association of Public Insurance Adjusters (FAPIA) said, it “discriminates against Citizens 1.5 million policyholders” because it prevents policyholders “… from being allowed to pay for professional claims assistance on the  initial part of their claim–when they need help most.”

While it’s true some PA’s may decline to represent a Citizens claimant on “…the initial part of their claim…” (Translated; before problems would’ve even surfaced), it’s also true that PA’s aren’t barred from such representation and that “professional claims assistance” is still readily available from other sources, including: licensed agents, qualified attorneys, the Insurance Consumer Advocate, state mandated mediation and yes, even a company or independent adjuster.  And…unlike PA fee’s, none of these decrease the policyholders final payout; some are free!

In his most recent advertorial published by the Tallahassee Democrat, Mr. Cucarro refers to a PA’s remuneration as a “contingency fee”; like what attorney’s get from personal injury lawsuits.

He didn’t mention the difference–attorney’s are called after someone is injured. PA’s want signed contracts before there’s a problem and even when Citizens had every intention of paying the full amount required under the policy. This is partially what creates the inherent claim delays.  (See NOTE #1 below).

Again, nothing in this law prevents PA’s from assisting a Citizens claimant beginning with the first notice of loss up until the final check is cut. I don’t know this, but…I suspect their problem may be that a substantial majority of Citizens claims are handled satisfactorily and any disputes stem from  differences in the amount–which can be resolved with “free” state sponsored mediation.

As proof, consider that in his Democrat advertorial Cucarro again cites the irrelevant OPPAGA study intimating that hiring a PA will increase Citizens claim payouts by almost $8,000. (See NOTE #2 below).

By opposing this new law on the grounds it bars representation by a PA, is Cucarro (and, thus FAPIA) saying that $8k isn’t enough for PA’s, or is he saying the difference between the offer and the payout isn’t really as much as $8,000 as I contend? (See my previous post–5/9/11)     

Anyway…faced with losing such a fertile field of prospects, what are public adjusters to do?

For one thing they can ask lawmakers to repeal the law.

For another, they can write letters to editors that cover only half the story. See what I mean in  the one published by the  Bradenton Herald.

Before closing I must admit to agreeing with one point in Cucarro’s letter–lawmakers should address the problem of discrimination in this new law.  But…they should not do so by repealing it but by expanding its application to all policyholders, even those who aren’t in Citizens.

Why should the 6 million homeowners subsidizing Citizens be treated worse than the 1.5 million they subsidize?

If it’s good for the goose, it could be great for the gander!


NOTE #1: The study by OPPAGA stated that for Citizens catastrophe claims; “…when public adjusters represented policyholders, claims processing typically took between 132 to 296 days longer than claims without public adjuster representation.”

NOTE #2: Cuccaro’s Democrat advertorial stated the following  “…During the study period (March 2008 to June 2009), a review of 61,324 non-catastrophe claims found that policyholders using public adjusters received an estimated $9,379 per claim. Those not using a public adjuster received an estimated $1,391.”

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