Universal Insurance Holdings to Repay Over $30 Million to Florida Hurricane Fund

Universal Insurance Holdings Inc. Settles with Florida Hurricane Fund

Universal Insurance Holdings Inc. has committed to reimbursing over $30 million to Florida’s hurricane fund, in addition to paying $4 million in fines. This decision follows allegations that the insurer improperly sought reimbursements for claims not eligible under Hurricane Irma, as reported by Best Wire.

While Universal denies any fraudulent conduct, the company asserts that the settlement will not affect its financial standing, as it had allocated reserves for this purpose over two years ago. The investigation was initiated by a former employee who accused the company of inflating reimbursement claims with non-Irma related incidents. The whistleblower alleged that Universal deliberately misrepresented claims data to enhance its recovery from the Florida Hurricane Catastrophe Fund, which reimburses insurers for hurricane-related losses.

Florida Attorney General James Uthmeier revealed that the investigation uncovered numerous unrelated claims that were wrongfully submitted for reimbursement. These included damages not caused by hurricanes, thereby making them ineligible for payout according to the fund’s regulations. The attorney general’s office stated that Universal’s reporting practices resulted in excessive payments from the hurricane fund.

Under the settlement, Universal will retract its reimbursement requests for the disputed claims, reducing its payout from the fund by more than $30 million. The company has also agreed to revise its policies and procedures to prevent future discrepancies.

Universal continues to argue that the allegations are without merit, explaining that claims data undergo constant evaluation and can be reclassified as new information surfaces. Some claims initially marked as hurricane-related were later found to be unrelated to the storm.

The claims reassessment involved about 1% of the company’s Irma-related claims, according to Universal. The company emphasized that insurers often revisit claims data as additional details come to light, which can lead to reclassification.

The Florida Hurricane Catastrophe Fund serves as a financial safety net for insurers, reimbursing them for homeowners’ claims after hurricanes. The fund’s goal is to stabilize Florida’s insurance market by aiding carriers in managing catastrophic losses. In 2020, Universal had reportedly increased its estimated losses from Hurricane Irma to $1.4 billion, anticipating additional claims.

• #Florida hurricane fund
• #Hurricane Irma claims
• #Universal Insurance Holdings