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Task Force on Citizens Property Insurance Claims Handling and Resolution

News Article

Article published Jun 5, 2007
Citizens asks for time limit on claim disputes

Facing criticism for thousands of 2004 and 2005 hurricane claims still open, Citizens Property Insurance seeks to rein in the lawyers and freelance adjusters it alleges are whipping up disputes in order to pocket large fees.

Curtis Hutchens, assistant general counsel for the state-run property insurer, on Monday suggested to lawmakers limiting the time a homeowner has to challenge disputed claims.

''We have created a spawning ground for this stuff to go on,'' said Rep. Julio Robaina, R-Miami, who told stories of public adjusters offering wide-screen televisions to homeowners who hire them to challenge their insurers. In return, those adjusters collect fees of up to 40 percent of the insurance claim check.

The forum for the exchange was Monday's meeting of a state task force on Citizens Property Insurance claims handling.

''I can't say they have failed to close claims as much as they have gotten a lot of new ones and have had a lot reopen,'' Insurance Consumer Advocate Bob Milligan said.

Chip Merlin, a Tampa property-insurance lawyer, warned against limiting the rights of homeowners to contend with what he said are ''statistical issues'' at the state's largest property insurer.

Citizens, as of the end of May, had 3,510 claims from 2004 and 2005 hurricanes still pending, 2,723 of them in dispute over total damage exceeding $120 million.

They include 986 cases in court, a number that encompasses many Panhandle residents suing Citizens for full payment on homes destroyed by wind and flood in Hurricane Ivan.

Advertising by lawyers and public adjusters may add to the number of insurance claims in dispute, including bogus claims, Merlin said, ''but what about all the legitimate problems you don't know about? I'm telling you, I don't perceive that there's a numerical problem.''

The four-storm 2004 hurricane season turned Florida into a magnet for public adjusters, private contractors who settle claims on behalf of the homeowner instead of working for an insurance company. The number of registered public adjusters in the state rose from 400 to more than 2,500, said Raymond Altieri, past president of the Florida Association of Public Adjusters.

A storm-free 2006 left those adjusters idle, an environment Citizens blames for the number of storm victims now challenging their claim checks.

''There are some serious problems,'' concurred Altieri, who said his association has pushed for tighter state regulation of public adjusters, to separate professionals from moonlighters.''

Sen. Mike Fasano, R-New Port Richey, raised his own concerns with Citizens' practice of hiring adjusters from competing insurance companies cutting back their business in Florida, especially Allstate. They are paid a percentage of every claim they settle on Citizens' behalf.

''I am sure Allstate doesn't think it is making money,'' Hutchens said in defense of the practice.

''They're not in the business of losing money,'' Fasano retorted.


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