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Liability for Unpaid Losses and Loss Adjustment Expenses | 9 Months Ended
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Sep. 30, 2021
Insurance [Abstract] |
Liability for unpaid losses and loss adjustment expenses | LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSE (LAE) We determine the reserve for unpaid losses on an individual case basis for all incidents reported. The liability also includes amounts for incurred but not reported (IBNR) claims as of the balance sheet date. The table below shows the analysis of our reserve for unpaid losses for the nine-months ended September 30, 2021 and 2020 on a GAAP basis:
| September 30,
| 2021 |  | 2020
Balance at January 1 | $ | 1,089,966 |  |  | $ | 760,357 |
Less: reinsurance recoverable on unpaid losses | 674,746 |  |  | 482,315 |
Net balance at January 1 | $ | 415,220 |  |  | $ | 278,042 |
Incurred related to: |  |  |
Current year | 305,270 |  |  | 429,347 |
Prior years | 31,344 |  |  | (6,165) |
Total incurred | $ | 336,614 |  |  | $ | 423,182 |
Paid related to: |  |  |
Current year | 152,415 |  |  | 195,728 |
Prior years | 243,741 |  |  | 125,085 |
Total paid | $ | 396,156 |  |  | $ | 320,813 |
Net balance at September 30 | $ | 355,678 |  |  | $ | 380,411 |
Plus: reinsurance recoverable on unpaid losses | 1,153,799 |  |  | 701,715 |
Balance at September 30 | $ | 1,509,477 |  |  | $ | 1,082,126 |
Composition of reserve for unpaid losses and LAE: |  |  |
Case reserves | $ | 499,311 |  |  | $ | 361,672 |
IBNR reserves | 1,010,166 |  |  | 720,454 |
Balance at September 30 | $ | 1,509,477 |  |  | $ | 1,082,126 |
Based upon our internal analysis and our review of the annual statement of actuarial opinion provided by our actuarial consultants at December 31, 2020, along with our assessment of litigation claim trends that developed during 2021, we believe that the reserve for unpaid losses reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date. As reflected in the table above, we had adverse development in 2021 related to prior year losses. This adverse development came as a result of the strengthening of our reserves based on increased litigation related to claims being filed in the state of Florida. The loss payments made by the Company during the nine months ended September 30, 2021 were higher than the loss payments made during the nine months ended September 30, 2020, due to the settling of claims related to the unprecedented catastrophe activity that took place in 2020. Case and IBNR reserves increased when compared to the prior period as a result of Winter Storm Uri which occurred in the first quarter of 2021 and Hurricane Ida which made landfall in the third quarter of 2021.

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- Definition The entire disclosure for insurance products considered to be short-duration contracts because the contract provides insurance protection for a fixed period of short duration and enables the insurer to cancel the contract or to adjust the provisions of the contract at the end of any contract period, such as adjusting the amount of premiums charged or coverage provided, and on contracts on which amounts are paid but insurance risk is not transferred. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -URI http://asc.fasb.org/topic&trid=2303980 + Details
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