This photo shows flooded streets and wind-blown trees during Hurricane Irma in 2017. (Credit: Satoshi Kina/Adobe Stock)
A Florida home insurance company is set to pay the state $6.5 million to settle alleged “fraudulent” hurricane claims.
The FHCF is a tax-exempt state fund that home insurers in the state pay into. It serves as a trust fund to reimburse residential property insurers for a portion of hurricane losses in the state. All residential property insurance companies that do business in Florida are required to enter into a reimbursement contract with the FHCF. The fund functions vaguely like reinsurance in that it covers a percentage of an insurer’s losses in excess of their retention, up to a set maximum. The fund is self-sustaining and funded solely by premiums paid by participating insurance companies.
According to a release from the attorney general’s office, a whistleblower lawsuit filed in 2020 led to the office launching its own investigation into whether claims made to the hurricane fund by UPCIC were actually caused by Hurricane Irma.
The release states, in part: “During the course of that investigation, numerous unrelated claims were identified in the submissions from UPCIC to the FHCF. As a result, the company agreed not to seek reimbursement for those claims, lowering the FHCF payout from Hurricane Irma to UPCIC by more than $30 million. The company also agreed to pay more than $4 million in fines and implement changes to its policies and procedures.”
While the insurer admits no wrongdoing, it agreed to pay the state of Florida $6.5 million, which includes $2.4 million in legal fees.
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