The largest private property insurance company in Florida, second largest overall after state-run Citizens Insurance, has been slapped with a $1.26 million fine for several violations, including unnecessarily delaying claims payments to policyholders. As Florida property insurance lawyers, we know that holding insurance companies accountable for unfair behavior towards their customers is important for keeping the insurance market honest.
Universal Property & Casualty Insurance Company, which is a subsidiary of Universal Insurance Holdings and is based in Fort Lauderdale, has about 542,000 policyholders in Florida and receives about $765 million in premium payments each year from those policyholders, according to news sources. State regulators from the Florida Office of Insurance Regulation have been reviewing Universal for some time, and the president and CEO stepped down in February while the investigation was ongoing.
The Office of Insurance Regulation found numerous violations from between 2009 and March 2013, including delaying payments for claims already determined to be valid. Another violation, found to have occurred 26 times by investigators, was that the company failed to return unearned premiums to customers whose policies were cancelled within the 15 days required. Universal also could not prove that they sent timely notices of a policy’s cancellation or nonrenewal and the company also cancelled 262 policies for misstatements without giving the policyholder the 100 day notice as required by law.
The Office of Insurance Regulation also found that Universal voided 12 insurance policies without a valid reason, due to investigations after the fact into information on the original application. This is a shady practice many insurance companies try to use. When a big claim comes in, often after years of the customer dutifully paying for the policy, the insurance company goes back and investigates the original application to find any mistake to void the policy so the company doesn’t have to pay the claim, which can be tens of thousands of dollars.
Other violations found by the Office were that Universal did not create a policyholder complaint database and did not make adjustments to estimate the company’s loss reserves, which could have made the company lack the money necessary to pay out its claims. One issue that the Office complained about but Universal has already taken steps to correct was the company’s policy of having reinsurance contracts with companies controlled by Universal, guaranteeing profits for the reinsurer and losses for Universal itself. Universal has now allowed part of its reinsurance to be in the open market.
The insurance company had 21 days from receiving notice of the fine to decide if it wants to challenge it.
If your insurance company is refusing to give you the benefits you paid for and are owed, contact a Florida insurance property attorney to learn about your options. Under Florida insurance law, if you proceed with a case and you succeed the attorney’s fees will automatically be the responsibility of the insurance company. So no matter the size of your claim, you would get to keep the entire court award.
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