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On Thursday, yet another insurance company announced it would be leaving the state of Florida.
The parent company, United Insurance Holdings Corp., announced that United Property & Casualty Insurance Company (also known as United P&C or UPC Insurance) has filed plans to withdraw from Florida, Texas, Louisiana and New York.
UPC Insurance is one of the largest home insurers in Florida according to insurance expert Mark Friedlander. Friedlander is the Florida spokesperson for the Insurance Information Institute.
In a statement, the company’s Chairman and CEO Dan Peed said:
“Due to significant uncertainty around the future availability of reinsurance for our personal lines business, I believe placing United P&C into an orderly run-off is prudent and necessary to protect the Company and its policyholders. The Company is actively pursuing opportunities to leverage our people, technology, and other capabilities. Our commercial business continues to perform well and provides the Company a stable platform to build new engines of growth and profitability.”
The announcement could mean that policyholders may lose their insurance during this hurricane season according to Friedlander.
“All policyholders of UPC now will need to find new coverage because their coverage is not going to be renewed,” he said. “It’s a really scary situation right now for Florida homeowners because if this company fails, this will be the sixth this year. There are many other companies that are in precarious financial positions today.”
The company’s announcement of its departure comes after the insurance rating bureau, Demotech, said it will withdraw UPC’s financial stability rating according to the company. UPC’s rating had already been downgraded prior to that.
So when could policyholders feel the impact?
“It could be very soon,” said Friedlander.
Friedlander said Florida’s insurance regulator now has to determine if the company is insolvent. If it is, he said UPC will be forced to liquidate quickly and that will trigger it to issue a notice to policyholders to prepare.
“By state law: a 30 day written notice. It cannot wait until after hurricane season. So it could happen very quickly,” Friedlander said.
WESH 2 News reached out to UPC Insurance for more information, but has not yet heard back. According to an investor presentation in May, UPC had over 185,000 policies in Florida as of March 31.
This comes about a month after another insurance company, Bankers Insurance Group, announced it would be pulling out of Florida.
“The Florida private insurance market is collapsing,” said Mark Friedlander.
Friedlander is the Florida spokesperson for the Insurance Information Institute. He said Bankers Insurance was the 13thhome insurer in Florida to make such a change this year. The institute’s list includes home insurers that have either announced an exit from the Florida market, placed a moratorium on writing new business or gone insolvent.
Friedlander said Bankers’ departure leaves people with over 50 other possible options in the state.
“It’s a very volatile marketplace right now,” he said.
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