New Challenges for Fla. Contractors After State Insurer Cuts Adjusters from Claims Payouts

Citizens Insurance, Florida’s last-resort insurer, returns claims checks to homeowners, setting up roofers and suppliers to potentially chase payments through disputes

Citizens property Insurance Corp. now issues claims checks only to policyholders, shifting payment responsibility and disputes to homeowners, contractors, and suppliers. — Citizens Property Insurance Corp. has begun issuing claims checks solely to policyholders, a change that shifts payment responsibility — and potential disputes — onto homeowners, contractors and their material suppliers.
— Image courtesy of CNBC

Updated at 8:25 p.m., June 26

Citizens Property Insurance Corp., Florida's insurer of last resort, has unexpectedly discontinued its longstanding practice of listing public adjusters as co-payees on claims checks, catching the insurance and roofing sectors off guard.

Starting this month, Citizens is now paying only policyholders, creating a new — and possibly expensive — middleman role for roofers and suppliers.

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For decades, Florida roofers and other contractors have relied on Assignment of Benefits (AOB) agreements to streamline their cash flow. Homeowners assign their claims proceeds directly to the contractor, who then bills the insurer and collects payment without waiting for the homeowner.

By removing adjusters, or effectively any non-insured payee from settlement checks, opponents argue that Citizens has shifted the burden back onto homeowners, contractors, and, by extension, the vendors who supply them

“We’re talking about a sea-change in the way Florida roofs get repaired,” Shaun Markwardt, a Nashville-based public adjuster who works extensively in the Sunshine State, told Insurance Journal, which first reported this story.

“Contractors now have to trust that the homeowner, fresh off a potentially traumatic loss, will handle their obligations to the adjuster—and to the roofer—on time. It’s a recipe for slow payments, disputes and liens,” Markwardt added,

Credit Crunch for Materials

Local roofing outfits—many of which operate on razor-thin margins and extend net 30 credit to suppliers — may face the prospect of longer cash conversion cycles.

The ripple effects could also spill over to shingle suppliers and underlayment manufacturers, with a cash crunch stalling orders if contractors push out delivery dates or tighten credit terms to compensate for the uncertainty.

Some midsize contractors are already rewriting their contracts to demand larger up-front deposits — sometimes 20% to 30% of the job cost — or escrow arrangements, a departure from standard practice in Florida’s competitive roofing market.

“Our overhead is fixed,” explained one Tampa-area contractor who requested his name not be used. “If we’re not confident in getting paid promptly, we have to build that into our bids. Homeowners will feel it—insurance proceeds don’t stretch as far.”

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Insurers and the Litigation Headache

Citizens leaders defend the change as a way to simplify claims administration and curb the torrent of AOB-related litigation that has driven up premiums statewide.

The state-regulated carrier handled roughly 140,000 claims between October 2024 and March 2025, according to the Florida Office of Insurance Regulation; roofing claims remain the carrier’s largest single liability.

The change is intended to simplify the claims process for policyholders without altering their statutory agreements with public adjusters, Michael Peltier, a Citizens spokesman, told Insurance Journal.

“For years, assignment abuse has been the leading driver of spurious lawsuits and inflated costs,” explained a rival carrier’s in-house counsel of the Citizens decision. “By ensuring payments go directly to the policyholder, [insurance carriers] preserve contractual rights without altering adjusters’ fees, which remain governed by statute.”

Policy supporters acknowledge the new scheme is untested. If homeowners redirect funds meant for contractors or adjusters, Citizens might face new complaints — and disputes — in addition to the current litigation.

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A Broader Precedent?

Florida often sets the playbook for property-insurance trends nationwide. Public adjuster advocates warn that if Citizens’ policy survives legal scrutiny, other carriers, and even other state guaranty funds, may follow suit.

Nancy Dominguez, managing director of the Florida Association of Public Insurance Adjusters, has already hinted at a potential court challenge.

“Our members provide a vital check on insurer estimates,” she asserted. “De-emphasizing co-payee status undermines the balance of power in claims negotiations and risks leaving homeowners—and contractors—caught in the middle.”

Contractors, suppliers and insurers are bracing for the fallout. At Citizens, the carrier says executives are closely monitoring the first round of post-June claims, eager to learn whether the change eases legal costs — or shifts headaches from carriers to the trades that repair the damage.

In Florida’s challenging market — shaped by legislative reforms from 2019 to 2023, a series of severe storms, and now unwanted attention on immigrant labor — those answers could determine the speed of roof repairs and the financial stability of contractors and suppliers operating on the edge of cash flow.

QUICK READ

End of Co-Payee Practice: As of June, Citizens Property Insurance has ceased naming public adjusters (and any non-insured payees) on claims checks, directing payments solely to policyholders.
Revival of the “Middleman”: By removing direct assignment of benefits (AOB) payments, contractors and suppliers must now rely on homeowners to forward funds for adjuster and roofer fees — introducing potential delays, disputes, and liens.
Credit-Cycle Strain: Florida roofing contractors—already operating on thin margins and offering net-30 terms—face extended cash-conversion cycles. Many are demanding deposits of 20–30% or escrow arrangements upfront to mitigate payment risk.
Litigation and Premium Rationale: Citizens defends the policy as a means to curtail AOB-driven litigation (140,000 claims handled by Citizens from October 2024 to March 2025) and, by simplifying administration, to help control statewide insurance costs.
Potential Nationwide Ripple: Observers warn that if Citizens’ policy survives legal challenges, other insurers and state guaranty funds may emulate it — prompting public adjuster associations to prepare for court battles over co-payee rights.

^*Correction: A quote from a rival insurance carrier was mistakenly attributed to Michael Peltier, a spokesman for Citizens Insurance.

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Bryan Gottlieb is the online editor at Engineering News-Record (ENR).

Gottlieb is a five-time Society of Professional Journalists Excellence in Journalism award winner with more than a decade of experience covering business, construction, and community issues. He has worked at Adweek, managed a community newsroom in Santa Monica, Calif., and reported on finance, law, and real estate for the San Diego Daily Transcript. He later served as editor-in-chief of the Detroit Metro Times and was managing editor at Roofing Contractor, where he helped shape national industry coverage.

Gottlieb covers breaking news, large-scale infrastructure projects, new products and business.