Citizens Property Insurance Corp., Florida's insurer of the last way out, has unexpectedly hired his many years of practice to list public lists as a paid for damage cheek and to grasp the insurance and roofing sectors unprepared.
From this month, Citizens now only pays policyholder and creates a new – and possibly expensive – Middle -man role for roofers and suppliers.
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Florida Dachdecker and other contractors have been relating to the assignment of services (AOB) for decades to rationalize their cash flow. Homeowners provide their claims directly to the contractor, who then charges the insurer and collects the payment without waiting for the homeowner.
By removing directories or effectively non -insured payer from settlement checks, the opponents argue that citizens attribute the burden on homeowners, contractors and thus also the providers they deliver.
“We speak of a change of lake in the way in which Florida roofs are repaired” Insurance journalWhat this story first reported.
“Contractors must now trust that the homeowner, who has a potentially traumatic loss of a potentially traumatic loss, is transferred to the expert – and the roofer.
Credit crisis for materials
Local outfits for roofer from which many are operated with razor thin margins and the providers of Netto 30 can be expanded-the prospect of longer money conversion cycles can be issued.
The Ripple effects could also be transferred to shingle suppliers and documents, whereby a cash crunch is commissioned if the contractors drive delivery dates or tighten the credit conditions in order to compensate for uncertainty.
Some medium-sized contractors are already rewriting their contracts in order to request larger preliminary deposits to 20% to 30% of labor costs or trust agreements, a deviation from the standard practice in the competitive roof market in Florida.
“Our overhead is determined,” said a contractor of the Tampa region who did not use his name. “If we are not confident that we are paid immediately, we have to incorporate it into our commandments. Homeowners will feel it – the insurance proceeds will not extend that far.”
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Insurers and the headache of the legal disputes
The heads of state and government of the citizens defend the change to simplify the administration of the agency and to contain the current of AOB-related legal disputes that have increased the premiums nationwide.
According to the Florida Office of Insurance Regulle, the state -regulated airline processed around 140,000 claims between October 2024 and March 2025. The underlying claims remain the largest individual liability of the carrier.
“The abuse of abuse of order has been the leading driver of false lawsuits and inflated costs for years,” says Michael Peltier, spokesman for the citizens. “By ensuring that the payments go directly to the policyholder, we receive contractual rights without changing the fees of the settings that exist according to the law.”
Political supporters acknowledge that the new program is undestected. If homeowners, who are intended for contractors or directories, carry out in addition to the current legal disputes with new complaints – and disputes.
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A broader precedent?
Florida often sets the game book nationwide for real estate insurance trends. The lawyers for public attitudes warn that other airlines and even other state guarantee funds can survive the legal system of citizens.
Nancy Dominguez, Managing Director of the Florida Association of Public Insurance Adminessers, has already pointed out a potential court view.
“Our members provide an important review of the insurer's estimates,” she said. “The status of the CO adjustment status undermines the balance of power in damage negotiations and risks that leave homeowners and contractors in the middle.”
Treaty, suppliers and insurers are prepared for the Fallout. For the citizens, the airlines tells that managers monitor the first round of claims after June and to find out whether the change makes legal costs easier or relieves the headache of airlines to the shops that repair the damage.
In Florida's challenging market – characterized by legislative reforms from 2019 to 2023, a number of heavy storms and now undesirable attention for workers workers, these answers were able to determine the speed of the roof repairs and the financial stability of contractors and suppliers on the verge of the cashflow.
Reading
- End of the Co-Payee practice: From June, the real estate insurance of Citizens has hired that name public directories (and not insured payers) in the event of damage checks and only instruct the payments to the policyholder.
- Resuscitation of the “middle man”: By removing the direct payments (Direct Directment of Benefits), contractors and suppliers must now rely on homeowners in order to guide funds for the fees for the submission of experts and roofers – the introduction of potential delays, disputes and basic lien.
- Credit cycle strain: Florida-roofer in total on thin edges and offer net-30-office time-long money conversion cycles. Many require 20–30 percent deposits or trust agreements in advance to reduce the payment risk.
- Legal disputes and premium justification: Citizens defend the directive as a means of restricting AOB-controlled legal disputes (140,000 claims treated by the citizens from October 2024 to March 2025) and by simplifying the administration to control the nationwide insurance costs.
- Potential nationwide ripple: Observers warn that other insurers and state guarantees can imitate them if the politics of citizens survive the legal challenges-and public employment associations for preparation for court campaigns on the rights of Co-Payee.