Sun Sentinel Palm Beach Edition
Universal South Florida’s top insurer
Fifteen months after dethroning state-run Citizens Property Insurance Corp. as the top property insurer in the South Florida metro region, Fort Lauderdalebased Universal Property & Casualty continues to expand its share of the market.
Universal added 29,560 residential and commercial policies in the tricounty region between June 30, 2017, and June 30, 2018, according to data maintained by the state Office of Insurance Regulation.
The additions increased the number of policies held by Universal in the region from 237,172 to 266,732 — and widened the company’s lead over second-place Citizens to 41,304 policies.
Citizens, the so-called insurer of last resort, was South Florida’s largest insurer for years, and in October 2011 had 616,071 policies while Universal had 185,980 in Palm Beach, Broward and Miami-Dade counties. That was an era when the hurricanes of 2004-05 were still a fresh memory for private market insurers, and many refused to cover homes in what they saw as the most vulnerable areas.
However, as the state approached a decade with no direct hit by a named hurricane and smaller companies were incentivized by the state to “depopulate” Citizens policies, the private market reabsorbed all but the most risky policies.
In recent years, many of the companies that were most active in the Citizens depopulation program have stopped writing policies in the region, citing skyrocketing costs from non-weather water damage claims and resulting litigation by water restoration companies.
The newest tally reflects the continued pullout from the South Florida region by numerous Florida-grown insurers, including:
Heritage (-10,856) United (-10,827)
People’s Trust (-8,824) FedNat, formerly Federated National (-8,462)
Florida Peninsula
(-7,282)
Homeowners Choice
(-6,393)
Filling the void — in addition to Universal increasing by 29,560 policies — were American Bankers of Florida, which added 7,843 and supplanted Heritage as South Florida’s thirdlargest insurer, followed by:
American Modern of
Florida (+6,489)
National Specialty
(+6,372)
Family Security
(+4,238)
St. Johns (+4,124)
Asked why Universal continues to expand aggressively in South Florida while other companies are in retreat, company spokesman Travis Miller said it uses a “sophisticated actuarial and modeling process to ensure it writes policies in a prudent manner.”
Also, the company writes an increasing percentage of its business outside Florida, which spreads risk and lowers the probability that heavy losses from any particular region could threaten the health of the company, he said.
Universal’s “experience in the Florida market and its scale contribute to its ability to write policies throughout the state, including the tricounty area,” Miller said. He said one of the company’s hallmarks over 20 years has been “providing a stable and consistent market for consumers and agents, including in the tricounty region.”
Representatives of American Bankers and Heritage did not immediately respond to a request for comment Wednesday.
Ryan Papy, president of Keyes Insurance agency, which is an affiliate of the Tom Gallagher Insurance agency, said one reason Universal continues to grow is it’s one of a dwindling number of insurers that still offer full water damage coverage regardless of the age of the home.
To reduce their exposure to costly claims and lawsuits, most other insurers are capping non-weather water damage coverage at $10,000 for homes 40 years and older, which describes nearly half of the tricounty region’s housing stock, according to U.S. Census Bureau data.