Is UPC Insurance going out of business? Homeowners in some risky locations might have found United Property & Casualty Insurance Company a good option. It is intended for people who also enjoy dealing with live agents. New policies aren’t available now because the business has been declared insolvent.
United Property & Casualty Insurance (UPC) is the tenth Florida-based property insurance business to enter receivership in the previous three years. This indicates that they lack the financial resources to cover claim payments. The Florida Office of Insurance Regulation (OIR) later classified the business as insolvent.
It’s hard to figure out why someone would want to launch a property insurance business in Florida in such a risky market. A new business in Tampa has already surpassed 200,000 policies from failing businesses. This was to rank among the top suppliers. Let us explore it in this article.
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What happened to UPC insurance?
UPC Insurance is a Florida-based property and liability insurance provider. It is owned and operated in the United States. It writes business, residential, homeowner’s, and disaster insurance policies in many coastal states.UPC Insurance announced in 2018 that it would construct a second new headquarters in downtown St. Petersburg. The business also joined forces with R.J. Kiln & Co., a division of Tokio Marine Kiln. This was to establish Journey Insurance Company, a casualty and property insurance affiliate.
UPC Insurance recorded first-quarter calamity losses of $13 million after-tax in 2019. This was due to many major disasters. This includes the Brevard County hailstorm and potential loss creep from Hurricanes Irma and Michael.
Home insurance from UPC is no longer offered. On February 16, 2023, the Florida OIR certified the corporation insolvent. Some policies in Florida were given to the state, whereas others were given to Slide Insurance. Anyone with a UPC policy should keep an eye out for information from the firm about how to handle their coverage moving forward. It might be moved to another firm, or you might have to look for new insurance.
In the past, UPC provided coverage alternatives for houses in coastal regions. In such places, it was more challenging to locate home insurance solutions. Although UPC’s policies were relatively basic, customers might have been able to add to them with a few more coverage options. This includes service line coverage and home system protection.
For a $250,000 residence covered by insurance, the yearly average cost is $1,428. Since UPC no longer offers personal house insurance plans, no UPC home insurance prices are offered.
UPC was formerly offered in Florida, Georgia, Louisiana, New York, North Carolina, South Carolina, and Texas. The business surrendered the right to renew its plans, and Florida has declared it insolvent. This implies that UPC will stop offering home insurance.
UPC Insurance Lawsuit
In 1999, UPC was established. The company stopped accepting new Florida homeowner companies at the end of 2021. Four subsidiaries were combined into two by parent company United Insurance Holdings in 2022. It was done as part of a significant restructuring.
The actions were taken in response to significant underwriting losses in 2021 and the first part of 2022. Eventually, the company improved its balance sheet by taking various measures. UPC announced in June 2022 that it had merged with Family Security Insurance, one of its subsidiaries. OIR approved it. At the end of 2021, Family Security owned 1.84% of the Florida market, according to the financial rating company.
In July 2022, UPC sent out feelers for a potential sale or merger with another insurer due to significant losses. This took place following a significant reorganization plan and a fall in ratings.
According to UPC Chairman and CEO Dan Peed, putting UPC into an orderly run-off is wise and required to protect the company. Also, their policyholders were concerned due to the severe uncertainties surrounding the future availability of reinsurance for their personal lines business. Thus, the corporation sought ways to use its resources, employees, technology, and other assets.
In February 2023, the process to put UPC into receivership was started by Florida authorities. Florida’s interim insurance commissioner, Michael Yaworksy, wrote to Chief Financial Officer Jimmy Patronis. It is to start the process that will result in obtaining court approval to put UPC into receivership. According to records from the state’s Office of Insurance Regulation (OIR), these are. UPC had agreed with the idea.
The UPC stated in August 2022 that it would leave the Florida home insurance market. According to the Tampa Bay Times, Slide Insurance acquired 72,000 UPC policies.
UPC had around 135,000 policies in Florida until Slide acquired some of them. This is according to a document submitted to the SEC on February 6, 2023. UPC’s parent company, United Insurance Holdings Corporation, stated in another court filing on February 10 that UPC was likely to be put into receivership owing to insolvency.
On February 6, 2023, UPc was declared insolvent. So even if all of its assets were made instantly available, they wouldn’t be enough to cover all its debts. Virginia Christy, director of Property and Casualty Financial Oversight, stated this in an affidavit that was included with Yaworksy’s letter. Christy’s declaration further said that starting in 2017, UPC had annual net underwriting losses exceeding $35 million.
Even though UPC was still operating last year, industry insiders could see the end was near. This was predicted when Demotech lowered the insurer’s rating from “A” to “M.” The Insurance Information Institute saw Demotech’s decision to finally revoke UPC’s rating in late August 2022 as a hint that UPC would soon join Florida’s expanding list of bankrupt property insurers. In 2022, six insurance companies were placed under receivership due to financial difficulties.
Is UPC still in business?
UPC Insurance recorded a net loss of $294.9 million for the fourth quarter of 2022. This was compared to a net loss of $2.3 million during the same period in the prior year. According to UPC, the net loss was caused by many factors. This includes bad events connected to Hurricane Ian, which used up all the firm’s personal lines reinsurance coverage for the incident.
Besides that, UPC’s gross written premiums (GWP) for the quarter fell by 14.7%, from $268.9 million in Q421 to $229.2 million. UPC recorded a net loss of $468 million for the entire year, as opposed to a net loss of $57.9 million in 2021.
UPC was instructed to stop operating on February 27, 2023. The Second Judicial Circuit Court of Leon County, Florida, put UPC under receivership and issued a liquidation order, put UPC under receivership and issued a liquidation order. Under this ruling, the Florida Department of Financial Services was named receiver.
On March 29, 2023, at 12:01 in the morning, UPC’s insurance coverage will be terminated. If you are a policyholder, the policy will expire on this date unless your policy specifies an earlier expiration date.
Conclusion
The house insurance market does not offer UPC. The business has stopped providing online quotes. Also, it was recently declared insolvent in Florida. The firm’s service quality and financial stability may have been indicated by UPC’s high NAIC complaint index and the removal of its Demotech financial strength rating. If you were considering getting a quote from UPC, you should investigate and check quotes from other companies. This is to learn more about the prices, coverage options, discounts, and third-party scores and ratings pertinent to you.
