Simplification or Cost-Cutting? The Real Reason Behind Citizens Insurance’s New Policy
Citizens Property Insurance Corp. has made a big change. Public adjusters—professionals who help policyholders get fair insurance payouts—will no longer have their names included on settlement checks. Instead, checks will go directly to the policyholder.
Citizens says this is about simplifying the process. But is it really? Or is there more to it?
Why the Change?
Public adjusters are hired to handle insurance claims. They negotiate with the insurance company and often secure higher payouts than policyholders could on their own. In return, they take a percentage of the settlement as their fee.
Under the old system, the adjuster’s name was included on the check. This ensured they got paid directly. Sounds straightforward, right? Not always.
Sometimes, disputes over fees caused delays. If the adjuster and policyholder didn’t agree, the check could get held up. That meant policyholders had to wait longer for their money. And after a disaster, waiting isn’t ideal.
Citizens says the new policy fixes this. Checks now go straight to policyholders, giving them faster access to funds. Adjusters? They’ll need to collect their fee directly from the policyholder, based on their contract.
What Does This Mean for Public Adjusters?
For public adjusters, this change adds uncertainty. They now have to trust policyholders to pay them after the settlement. Most people will honor their contracts. But what if they don’t?
Maybe the policyholder forgets. Maybe they’re overwhelmed by other expenses. Or maybe they just decide not to pay. In those cases, the adjuster is left chasing payment. That could mean disputes—or even legal action.
This might discourage adjusters from taking on claims, especially smaller ones. Why take the risk if there’s no guarantee of payment? And if fewer adjusters are available, policyholders might struggle to find help.
Is It Really Simpler?
Citizens says this change is about making things easier for policyholders. And in some ways, it is. Checks won’t get delayed by disputes over adjuster fees. Policyholders can access their money faster, which is critical after a disaster.
But there’s another side. Critics argue this could make it harder for policyholders to get professional help. Public adjusters often secure higher payouts, which cost the insurer more. By making it harder for adjusters to get paid, Citizens might be discouraging their involvement. Is that really better for policyholders?
Example: The New Process in Action
Let’s say a hurricane damages your home. You hire a public adjuster to help with your claim. They negotiate and secure a $50,000 settlement.
Under the old system, the check would include both your name and the adjuster’s name. The adjuster would take their 10% fee—$5,000—directly from the check. Simple.
Now, the check is made out only to you. You’re responsible for paying the adjuster their $5,000. Most people will do the right thing. But what if you don’t? Maybe you’re dealing with other expenses and decide to hold off. Or maybe you think, “I did most of the work anyway.” The adjuster is left chasing you for payment. Messy, right?
The Bigger Picture
Public adjusters are more common in catastrophic claims. According to data, they’re involved in 39% of catastrophe claims but only 26% of non-catastrophe claims. Why? Catastrophic claims are a whole different ballgame. They’re bigger, messier, and come with higher stakes. That’s where public adjusters really prove their worth.
Here’s the big take away: they don’t just help navigate the chaos—they get results. For catastrophic claims, policyholders saw payouts that were 747% higher when they used a public adjuster. Even for smaller, non-catastrophic claims, the increase was 574%. Those numbers speak for themselves. Adjusters can make a huge difference, especially when disaster strikes.
But this change could shift that dynamic. If adjusters are discouraged from taking on claims, policyholders might lose out on those higher payouts. On the flip side, policyholders who don’t use adjusters won’t notice any difference. For them, it’s business as usual.
What’s Next?
If you’re a policyholder, here’s what you need to know. If you hire a public adjuster, you’ll need to pay them directly. Make sure you understand your contract and set aside the agreed fee. And if you’re filing a claim, think about whether you’ll need professional help.
So, is this change about simplification or cost-cutting? Maybe it’s a bit of both. Either way, it’s a reminder to stay informed. Because when disaster strikes, every decision matters.