Higher Homeowners' Insurance On the Way?

Even with our recent quiet hurricane seasons, lawmakers have been forced into a balancing act: Keeping Citizens Homeowners' Insurance rates affordable, while collecting enough money to pay all  its claims.

The insurance industry's been lobbying hard to convince lawmakers that *rate hikes* are now more important than affordable coverage for Florida homeowners.

For hundreds of thousands of South Florida residents, the state-run Citizens' Insurance program is the only carrier offering affordable coverage.

But for years, the industry's been trying force it to raise rates and cut back its' customers to drive them to more expensive private policies.

This years' "Citizens Re-Organization Plan" just passed its' first legislative battle in Tallahassee after being approved by a 6-4 margin the Senate's Insurance Committee.

Under the proposal, it makes it harder to qualify for Citizens' policies, authorizes rate hikes averaging about 25% statewide, eliminates all coverage for homes over $500,000, restricts the use of public adjusters and cuts-back some coverage.

Critics say if it's approved, consumers will face higher bills and a lot less coverage.

Local Insurance Agent Dulce Suarez Resnick, of NCF Insurance, says "It takes away their standard polices and substitutes inferior ones without replacement cost, water damage. It;s really a bad policy".

The move to raise rates follows years of insurance industry warnings that Citizens is under-capitalized and may not have enough money to pay claims in the event of a bad hurricane season.

But the current plan comes as Florida battles one of the highest foreclosure rates in the country, double digit unemployment, and a stalled real estate market.

Resnick says "The bottom line is it's going to mean higher rates..and less coverage."

Former Governor Charlie Crist vetoed a similar bill last year.

But Governor Rick Scott supports this year's version. 

While the bill faces more hearings in Tallahassee, so far there's been little organized opposition to it.

And that leaves more than a million homeowners potentially facing higher rates and fewer choices for affordable coverage as the 2011 Hurricane Season gets closer every day.