United Property and Casualty (UPC), the ninth property insurer in Florida to go insolvent since 2021, and the largest to do so in 15 years, left many of its Florida customers in a nightmare. “UPC appeared to abandon their customers at their greatest time of need following the catastrophic hurricane,” said Mark Friedlander, the director of communications for the Insurance Information Institute, an industry association. UPC’s business model, insurance and financial experts say, reflects a lax regulatory framework that has made it even harder for Florida residents to get back on their feet after disasters.
UPC hemorrhaged money over the past six years, in large part because of costly claims from a series of major hurricanes. During this time, the company began to cut insurance adjusters’ damage estimates, and underpay and ignore increasingly desperate policyholders, according to a Washington Post investigation based on interviews with nearly two dozen people, including those who worked for UPC, policyholders, insurance experts and a review of hundreds of documents from regulators, adjusters, court cases, financial filings and other sources. The company underestimated how much it would have to spend to cover claims, but still paid shareholders, including top executives, millions of dollars in dividends, data showed.
State officials said it was their failing to reserve enough money as one of the primary reasons UPC went insolvent. People in the industry flagged evidence of alleged wrongdoing to regulators, but said their concerns were not seriously reviewed. And even though officials initiated monthly check-ins with UPC as its finances deteriorated, they mistakenly believed UPC could cover homeowners’ claims up until just shortly before the insolvency. UPC was the centerpiece of a larger insurance company, United Insurance Holdings Corp. The company has seen its stock price, which had declined dramatically in the wake of UPC’s struggles, bounce back more than 1,000 percent since December — adding more than $200 million in value. The company, which has since rebranded, has been touting its new, more lucrative future to prospective investors, saying it’s much stronger for getting out of the home insurance business.
UPC had the second most complaints in 2020-2021 — representing 7% of the roughly 24,000 complaints closed by the Florida Department of Financial Services during that period. Nearly all of those complaints had to do with how the carrier handled claims, according to public records from the agency, which investigates insurers for misconduct. During this period, the carrier started to become much more aggressive in deploying tactics to deny, delay and underpay homeowners after that disaster and subsequent weather events, according to interviews with three former adjusters, policyholders and their attorneys, as well internal and court documents.
“Insurance companies have been given tremendous amount of leeway in Florida,” Birny Birnbaum, the director of the Center for Economic Justice and a former insurance regulator said in an interview. “Light regulation lets these smaller companies come in and cherry pick what they want to cover. When there is no hurricane, they can make a tremendous amount of money. When there is one, executives can walk away without much liability and a lot richer.
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