Hurricane exposed problems with Citizens
Article Courtesy of The Orlando Sentinel
June 21, 2017
As Hurricane Matthew threatened South Florida last
October, Citizens Property Insurance Corp. sought to reassure
policyholders that all was well.
An Oct. 5 news release declared: “Citizens is ready for Hurricane
Matthew, Are You?”
Citizens revealed it was not ready to respond to a major
storm in Florida. Companies Citizens had hired to
provide independent claims adjusters for post-storm
damage assessments supplied far fewer adjusters than
The problems discovered after Matthew raise questions
about whether Citizens will be prepared when the next
major storm threatens. Citizens has developed a strategy
that would allow it to better respond, but hurricane
season is already under way and Citizens’ plan is not
scheduled to take effect until Aug. 1. That leaves open
the question as to whether the company can handle the
effect of a major storm between now and then.
If a storm does strike the state, Citizens can only hope
to draw enough adjusters from four firms that remain
active under an existing 2015 contract.
Contracts with the
four companies responsible for the 2016 adjuster
shortfall have been terminated. Citizens proposes to
create a new pool of adjusters.
An arborist uses a pole saw on a fallen tree at a
Maitland home affected by Hurricane Matthew last year.
In a statement, Citizens spokesman Michael Peltier said Friday he
presumes the companies still under contract would want to honor their
agreements “and provide good service. The bottom line is, the customer
According to the state Department of Financial Services’ database,
11,948 independent adjusters are certified in Florida to work for
insurance companies, down from 29,022 in 2011.
All property insurance companies rely on the ability to summon
independent adjusters after catastrophes or when hurricanes loom, says
Peter J. Crosa, president of the National Association of Independent
Insurance Adjusters and owner of St. Petersburg-based Peter J. Crosa &
That’s because in normal times, companies don’t need to directly employ
large numbers of adjusters. But when a major hurricane comes, everyone
competes for the same pool of certified adjusters, Crosa says.
Last October, when Hurricane Matthew threatened to make landfall near
West Palm Beach, Citizens estimated the storm would generate 75,000
claims. Citizens asked four claims adjuster management firms to deploy
624 adjusters, Adams told the Board of Governors last year.
The firms committed just 279 adjusters, forcing Citizens — which employs
only 64 year-round, full-time adjusters — to revise its preparations and
hope for the best.
Matthew veered north and hit areas with fewer Citizens customers. Just
3,500 Citizens claims came in statewide.
Adams told Citizens governors that the company dodged a bullet. If
75,000 claims had been filed, “we would have certainly failed as a
claims operation,” he said.
About 320 adjusters normally work for Citizens on a day-to-day basis, in
the field and in Citizens offices, and they would be among the first
shifted to storm duties, according to the new plan.