Is UPC Insurance Going Out Of Business? A Detailed Analysis

Is UPC Insurance facing financial troubles and going under? For homeowners residing in high-risk areas, United Property & Casualty Insurance Company might have been an attractive choice, particularly for those who prefer interacting with live agents.

Unfortunately, the company is currently unable to issue new policies due to its insolvency.

United Property & Casualty Insurance (UPC) joins the ranks of the tenth Florida-based property insurance business to enter receivership in the past three years.

This signals a lack of financial capacity to meet claim payments. The Florida Office of Insurance Regulation (OIR) officially designated the company as insolvent.

The decision to venture into the property insurance market in Florida, known for its high-risk nature, seems puzzling.

A new player in Tampa has managed to amass over 200,000 policies from struggling businesses, aiming to secure a prominent position among the top suppliers.

This article will delve into the factors contributing to this development.

Is UPC Insurance Going Out Of Business? A Detailed Analysis
Image source (Canva)

What Happened To UPC Insurance?

Florida-based UPC Insurance, operating in the U.S., provides property and liability insurance, including business, residential, and disaster policies in coastal states.

In 2018, it announced a new headquarters and partnered with R.J. Kiln & Co. to establish Journey Insurance Company.

In 2019, it faced $13 million in first-quarter calamity losses.

Since February 16, 2023, Florida OIR declared UPC insolvent; policies may transfer to other firms or necessitate new insurance.

UPC, once covering multiple states, surrendered renewal rights; Florida’s insolvency declaration led to discontinuation of home insurance services.

UPC Insurance Lawsuit

Established in 1999, UPC ceased accepting new Florida homeowner companies at the end of 2021.

In 2022, United Insurance Holdings, the parent company, merged four subsidiaries into two as part of a significant restructuring in response to underwriting losses.

Despite improvements, UPC faced uncertainties and sought a sale or merger in July 2022.

Facing insolvency, the company decided to leave the Florida home insurance market.

By February 6, 2023, UPC was declared insolvent with debts surpassing available assets, leading to the initiation of receivership proceedings.

Demotech’s rating downgrade in August 2022 had foreshadowed UPC’s financial troubles, making it the latest addition to Florida’s list of bankrupt property insurers.

Is UPC Still In Business?

UPC Insurance reported a significant net loss of $294.9 million in Q4 2022, compared to a $2.3 million loss in the same period the previous year.

Various factors contributed to the loss, including impacts from Hurricane Ian depleting personal lines reinsurance coverage.

Quarterly gross written premiums fell by 14.7% to $229.2 million.

Is UPC insurance going out of business
UPC Insurance, facing insolvency from Hurricane Ian losses, exits Florida, Louisiana, and Texas; withdrawal plans filed, with New York pending: Photo source (eHealth)

The company recorded a net loss of $468 million for the entire year, up from $57.9 million in 2021.

The Second Judicial Circuit Court of Leon County, Florida, ordered UPC to cease operations and placed it under receivership on February 27, 2023, with the Florida Department of Financial Services as the receiver.

Unless individual policies specify otherwise, UPC’s insurance coverage will terminate at 12:01 a.m. on March 29, 2023.

Read more: How to get bonded and insured for cleaning business

Conclusion

UPC lacks house insurance, no online quotes, and faces insolvency in Florida’s market.

Elevated NAIC complaints and Demotech rating removal signal worries about service and financial stability.

If considering a quote from UPC, explore other companies for pricing, coverage, discounts, and third-party scores.

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