How Florida Let A Top Insurer Abandon Homeowners In Their Time Of Greatest Need

Insurance — A pile of debris remains just steps from the beach in Fort Myers Beach, Fla., almost nine months after Hurricane Ian ravaged the area. (Thomas Simonetti for The Washington Post)

NORTH PORT, Fla. — Every week or so, Edward Raggie walks through his front door and enters a painful, infuriating time warp.

Everything looks exactly the way it did that day in December, when he and his wife, Joanne Ragge, hastily packed up their Hurricane Ian battered home after learning that dangerous mold had spread behind their white ceilings and bright blue walls. Their roof still leaks, its protective tarp peeling from the hot sun. Inside, brown insulation from the gaping hole in their ceiling pools on their swollen, lifted floors. Boxes of their family photos and belongings, stacked haphazardly, are still waiting to be moved out of the living room’s dank, musty air.

The couple, in their late 60s, are frozen in this “hell,” Ed says, because their insurance company, United Property and Casualty, ignored their claims for months after the hurricane and then severely underpaid them, before going insolvent earlier this year.

UPC, the ninth property insurer in Florida to go insolvent since 2021, and the largest to do so in 15 years, left many of its Florida customers in a similar nightmare, facing what is predicted to be a powerful hurricane season with still unfixed, hazardous homes, drained life savings and, in some cases, no insurance to protect them.

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.

UPC hemorrhaged money over the past six years, in large part because of costly claims from a series of major hurricanes. During this time, the company began to cut insurance adjusters’ damage estimates, and underpay and ignore increasingly desperate policyholders, according to a Washington Post investigation based on interviews with nearly two dozen people, including those who worked for UPC, policyholders, insurance experts and a review of hundreds of documents from regulators, adjusters, court cases financial filings and other sources.

The company also underestimated how much it would have to spend to cover claims, but still paid shareholders, including top executives who owned a significant percentage of the company, millions of dollars in dividends, data showed.

State officials, who said failing to reserve enough money was one of the primary reasons UPC went insolvent, struggled to respond as the situation worsened. People in the industry flagged evidence of alleged wrongdoing to regulators, but said their concerns were not seriously reviewed. And even though officials initiated monthly check-ins with UPC as its finances deteriorated, they mistakenly believed UPC could cover homeowners’ claims up until just shortly before the insolvency.

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.

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