An insurance company's collapse was long in the making — and is one of the most glaring examples of how, in the age of climate change, Florida’s insurance system has been failing to protect residents.
NORTH PORT, Fla. — Every week or so, Edward Raggie walks through his front door and enters a painful, infuriating time warp.
Suddenly losing their carrier while still in the thick of recovery was shocking to the Raggies, as well as other homeowners. But UPC’s collapse was long in the making — and is one of the most glaring examples of how, in the age of climate change, Florida’s insurance system has been failing to protect residents after they endure a major disaster.
Now, the state-run Florida Insurance Guaranty Association is responsible for trying to close 22,000 UPC claims, which will take more than a year and probably cost around $600 million, officials say. For the first time since Hurricane Andrew in 1992, the state has to levy an emergency assessment on nearly all Florida residents to help cover the cost of such a massive insolvency, further spiking homeowners’ rates.
UPC did not want to comment for this story, Brook Adler, United Insurance Holdings’ general counsel, said in an email. Its chief executive and chairman, Daniel Peed, did not return requests for comment. For months, other families have shared their horror stories and expressed their mounting frustration and desperation with their carrier’s silence, behavior and insolvency in interviews, and in Facebook and neighborhood groups. Families said letters of denial or coverage determinations never arrived. Their case managers would disappear and new ones would be assigned, restarting the case work — sometimes up to seven times. When UPC did make a coverage decision, the amounts were low.
In an interview, he explained how his office was “pretty aggressive when it came to our response to the evolving situation with United and UPC.”A big problem, Yaworsky pointed out, is that his office had been limited in what they could do regarding how parent companies act and what they do with their money.
But just a year later, Hurricane Irma ripped through Florida, followed by Hurricane Michael in 2018, and UPC started to lose a lot of money to claims. These annual losses grew from $35 million to well over $150 million, according to financial filings.
She and her son were in “survival mode,” she said. For a year, they had no kitchen. Photos show black mold splattered on the ceilings. To try to protect them, her son used plastic tarps to make new walls and floors. In 2019, Brown sued the carrier.
Adjusters working for UPC saw what was happening to homeowners on the inside. At the end of 2019, Lari Piscitelli joined the company as an independent adjuster to handle claims. He and other contractors grew increasingly alarmed at how their loss estimates were being cut and edited.
Make “sure to not opine to the causation to the damage to the roof tile,” read one directive. “State what you saw … and an engineer will determine the causation,” said another. Despite pushback from adjusters in the notes, one final report reflected the changes made by UPC, slicing a $60,000 roof estimate down to about $3,000, according to files seen by The Post.
In an email obtained by The Post, Buvens wrote that he “saw firsthand the waste, misuse of premium dollars,” as well as mismanagement and mistreatment of policyholders, and asked for the state to follow up “on the numerous UPC complaints that have been filed.” That same month, the American Policyholder Association, a nonprofit watchdog with a consumer protection unit led by a former prosecutor, sent two complaints to regulators alleging that UPC altered claims and told adjusters to “zero out” damage. The complaints were sent to the Office of Insurance Regulation, which regulates carriers, and the Department of Financial Services, which investigates allegations of wrongdoing.
UPC, like many other Florida carriers, was part of a web of affiliated companies under a larger firm. Its parent company, United, had 14 subsidiaries — which include other insurers, holding companies, legal, technology and claims services, reinsurers and managing general agents, who write policies and negotiate contracts. Reinsurers and managing general agents are key cogs in the insurance system, and provide a lot of support in exchange for big fees and commissions.
Peed and his wife pulled in about $21 million in dividends from 2017 until the end of 2021, corporate filings show. Other top executives were also raking in cash payments when UPC was falling apart. A total of $50 million in dividends was paid out during this period.In August 2022, UPC’s financial situation became concerning for Demotech, the credit rating agency, and it decided to exit the state, a gradual process known as “runoff” where it would not take on new business.
After 43 years of working, the 64-year-old planned to spend much of his retirement on his canal-front deck.
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