Paul Sanchez
Universal Insurance Company of North America is one of three Florida-based insurance companies that are cancelling or not renewing more than 50,000 property policies. The other two companies are Southern Fidelity Insurance Company and Gulfstream Property and Casualty Insurance Company. Universal Insurance has cited yearly losses of $4.1 million in 2019 and $22.5 million in 2020 as reasons for the cancellations.
| Characteristics | Values |
|---|---|
| Number of policies cancelled | 13,294 out of 57,000 |
| Reason for cancellation | Yearly losses of $4.1 million in 2019 and $22.5 million in 2020 |
| Total number of policies cancelled by 3 insurance companies | 53,000 |
| Number of policies cancelled by Southern Fidelity Insurance Company | 19,600 |
| Number of policies cancelled by Gulfstream Property and Casualty Insurance Company | 20,311 |
| Number of insurance companies cancelling policies | 3 |
| Areas affected | Lake, Orange, Osceola and Seminole Counties |
| Month and year of the news article | May 2021 |
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What You'll Learn
- Universal Insurance Company of North America is cancelling 13,294 policies
- Universal Insurance's surplus dropped by 40% from 2019 to 2020
- Universal Insurance is merging with a Texas-based company
- Universal Insurance is one of three companies dropping policies
- Universal Insurance's customers should contact their agents for new coverage
Universal Insurance Company of North America is cancelling 13,294 policies
Universal Insurance Company of North America has cited yearly losses of $4.1 million in 2019 and $22.5 million in 2020 as the reason for the cancellations. The company is also in the process of merging with a Texas-based insurer, Universal North America Insurance Company, which reported a surplus of $61,525,164 as of December 2020.
The Florida Office of Insurance Regulation has approved the cancellations, stating that they are necessary to maintain the financial stability of the insurance companies. Florida statute Chapter 224 Part III allows insurers to cancel policies when the company would otherwise be placed in a hazardous financial situation, such as an uptick in claims after hurricane damage or attorney's fees to defend itself over fraudulent adjuster claims.
The cancellations have left many Florida homeowners scrambling to find new insurance coverage, with some turning to Universal Insurance Company of North America is cancelling 13,294 policies, out of a total of 53,000 policies across Florida. This decision comes just before the 2021 hurricane season, leaving thousands of Floridians without home insurance.
Universal Insurance is one of three Florida-based insurance companies that are cancelling or not renewing policies. The other two are Southern Fidelity Insurance Company and Gulfstream Property and Casualty Insurance Company. All three companies cite the same reason for the cancellations: avoiding hazardous financial conditions.
Universal Insurance's decision is a direct result of yearly losses. The company reported losses of $4.1 million in 2019 and $22.5 million in 2020, with a 40% decrease in surplus during this period. In its filing to the Florida Office of Insurance Regulation, the company stated that it was cancelling the policies due to these financial losses.
The Florida Office of Insurance Regulation has approved these cancellations, which are allowed under Florida statute Chapter 224 Part III. This statute permits insurers to cancel policies when facing hazardous financial situations due to increased claims after hurricane damage or attorney's fees for defending against fraudulent adjuster claims.
The impact of these cancellations is significant, with many policyholders being given as little as 45 days' notice to find alternative coverage. This situation highlights the challenges faced by Florida's property insurance market, which has been described as "ailing" and suffering from rising costs and litigation.
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Universal Insurance's surplus dropped by 40% from 2019 to 2020
Universal Insurance Company of North America, along with two other Florida-based insurance companies, cancelled or did not renew more than 53,000 property policies in 2021. Universal Insurance cancelled 13,294 policies out of its total 57,000 Florida policies, citing yearly losses of $4.1 million in 2019 and $22.5 million in 2020. This significant drop in surplus, a decrease of 40% from 2019 to 2020, contributed to Universal Insurance's decision to terminate thousands of policies.
The surplus of Universal Insurance Company of North America dropped by approximately 40% from $37 million in 2019 to $22.3 million in 2020. This substantial decline in surplus is indicative of the financial challenges faced by the company during that period. The surplus reduction was a result of escalating costs from weather-related claims, as well as increased litigation and roof fraud.
Universal Insurance Company of North America has provided several reasons for the cancellation of policies, including yearly losses and a significant drop in surplus. In its filing with the Florida Office of Insurance Regulation, the company stated that it had incurred losses of $4.1 million in 2019 and $22.5 million in 2020. These losses were primarily driven by hurricane-related claims and fraudulent adjuster claims, as allowed for by Florida Statute Chapter 224 Part III.
The surplus drop of 40% from 2019 to 2020 is a significant factor contributing to the financial strain experienced by Universal Insurance Company of North America. The company has taken steps to address this situation, including seeking to merge with the Texas-based Universal North America Insurance Company, which reported a surplus of $61,525,164 as of December 2020. This merger is intended to bolster Universal Insurance's financial position and help mitigate the impact of the surplus decline.
The cancellation of policies by Universal Insurance and other Florida-based insurance companies has left many Florida homeowners and renters scrambling to find alternative coverage. The situation has been further exacerbated by rising costs from lawsuits and claims, with insurance companies facing increasing financial pressures. Florida's property insurance market is ailing, and there seems to be no quick fix on the horizon.
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Universal Insurance is merging with a Texas-based company
Universal Insurance Company of North America is one of three Florida-based insurance companies that are cancelling or not renewing more than 53,000 property policies as of June 2021, just before the start of hurricane season. The other two carriers are Southern Fidelity Insurance Company and Gulfstream Property and Casualty Insurance Company. Universal Insurance is cancelling 13,294 policies out of its total 57,000 Florida policies due to yearly losses of $4.1 million in 2019 and $22.5 million in 2020.
However, Universal Insurance is not leaving Florida entirely. The company is planning to merge with the Texas-based Universal North America Insurance Company, which reported a surplus of $61,525,164 as of December 2020. This merger will allow Universal Insurance to maintain its presence in Florida while also expanding its reach into Texas.
The decision to merge with a Texas-based company is likely influenced by the financial challenges faced by Universal Insurance in recent years. In addition to the significant losses incurred in 2019 and 2020, Universal's surplus also dove by about 40% from 2019 to 2020. By merging with a financially stable company, Universal Insurance can improve its financial position and better manage the risks associated with providing insurance in a state like Florida, which is prone to hurricanes and other natural disasters.
The merger between Universal Insurance and the Texas-based company is part of a broader trend in Florida's property insurance market. Florida's property insurance market has been ailing, with carriers posting their worst financial performance in decades. In recent years, several insurance companies have left the state or stopped writing new policies due to high catastrophe losses, rising reinsurance rates, and growing litigation costs. By merging with a larger or more financially stable company, insurers can spread their risks and improve their financial stability.
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Universal Insurance is one of three companies dropping policies
Universal Insurance of North America has stated that it is cancelling these policies due to yearly losses and to avoid a "hazardous financial condition". In its filing to the Florida Office of Insurance Regulation, the company stated that it was cancelling 13,294 policies out of its total 57,000 Florida policies. This is a result of a $22.3 million decrease in the company's surplus from 2019 to 2020, a 40% drop.
The Florida Office of Insurance Regulation has approved the cancellations of these policies, stating that it is an "extraordinary statutory remedy" to address insurers that are or may be in a hazardous financial situation. The office encourages consumers who receive a cancellation or non-renewal notice to immediately contact their agent to shop around for new coverage in the private market. If customers are unable to find coverage in the private market, they may be eligible to purchase coverage through the Citizens Property Insurance Corporation.
This issue is affecting both homeowners and renters in Florida, as landlords may pass on the higher insurance rates to their tenants. More than 50,000 Floridians are at risk of losing their home insurance, with many not yet aware of the situation. This mass cancellation of policies is common after years of heightened hurricane activity, with insurance companies weakened by prior storms and reinsurance bills.
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Universal Insurance's customers should contact their agents for new coverage
Universal Insurance Company of North America is one of three Florida-based insurance companies that are cancelling or not renewing more than 53,000 property policies. This means that Universal Insurance customers will need to find a new provider.
The Florida Office of Insurance Regulation has approved Universal Insurance and two other companies to offload a combined total of more than 50,000 policies. The other two insurance companies are Gulfstream Property and Casualty Insurance Company and Southern Fidelity Insurance Company.
Universal Insurance is cancelling 13,294 policies out of its total 57,000 Florida policies. This amounts to about a quarter of its Florida customers. The company has cited yearly losses of $4.1 million in 2019 and $22.5 million in 2020 as reasons for the cancellations.
Universal Insurance customers should contact their agents for new coverage. A spokeswoman with the Florida Office of Insurance Regulation has encouraged consumers who receive a cancellation or non-renewal notice to "immediately contact their agent to shop around for new coverage in the private market". If Universal Insurance customers are unable to find coverage in the private market, they may be eligible to purchase coverage through Citizens Property Insurance Corporation. They can also view sample rates by county using the OIR CHOICES rate comparison tool to further research their options.
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Frequently asked questions
Yes, Universal Insurance Company of North America is leaving Florida.
Universal Insurance is cancelling policies due to yearly losses of $4.1 million in 2019 and $22.5 million in 2020. The company is also facing increased litigation costs and rising reinsurance rates.
Universal Insurance is cancelling 13,294 policies out of its total 57,000 Florida policies.
Universal Insurance has already started cancelling policies, with some customers receiving notices that their policies will be terminated in as little as 45 days.
Customers who receive a cancellation notice should immediately contact their agent to shop around for new coverage in the private market. If customers are unable to find coverage in the private market, they may be eligible to purchase coverage through Citizens Property Insurance Corporation or other alternatives.
