Check your coverage carefully

As the 2006 hurricane season fast approaches, the bottom line on homeowners insurance is harsh: Costs more. Covers less.

Double-digit rate increases plus surcharges to make up deficits in the state-run insurance pool and the state's hurricane catastrophe fund will add hundreds of dollars to annual insurance premiums.

And after eight storms battered South Florida in the past two years, insurers are working furiously to lessen their risk. That means less coverage.

For instance, Wilma's foul winds blew away thousands of screened pool and porch enclosures. The few companies that still covered these structures quickly saw claims and losses pile up.

For 2006, many have decided not to cover the screened enclosures or have sharply curtailed what they will pay a homeowner to repair or replace them. One company will pay a maximum of $5,000 for these structures.

Advice to homeowners: Read renewal policies carefully because coverages have changed.

The 2005 insurance bill required insurers to add a cover page, written in plain English not insurance jargon, that sets out what each policy covers and what deductibles a homeowner has chosen.

This same law allowed deductibles of 2 percent, 5 percent or 10 percent of a home's insured value. A higher deductible does lower the annual premium. But if your home is damaged, that means a bigger upfront cost for you before your insurance pays for the rest of the repairs.

Many insurers are requesting double-digit rate increases for this year. Their reasoning: They need to pay more for reinsurance (that's insurance for insurance companies) and they're expecting to cover more losses from more storms this year.

The increases will be most severe for homeowners who buy their windstorm insurance from Citizens Property Insurance. More than half of the 830,000 homes Florida's state-run insurer of last resort covers are in South Florida.

Based on the 2006 insurance law, Citizens must raise rates enough to cover much of the damage caused by a severe storm -- the kind that might occur once in 100 years. Hardest hit will be Citizens windstorm policyholders living east of U.S. 1, whose current rates could double over the next three years.

The only relief in the new insurance bill passed as the state Legislature wound up its work for the year was a provision to use extra tax dollars to pay $715 million of Citizens' 2005 deficit of $1.7 billion.

With the state contribution, homeowners will be assessed 2 percent to 2.5 percent -- per $1,000 of annual premium -- this year. That's much less painful than the initial 10 percent surcharge contemplated by Citizens to make up the first part of its shortfall. The remaining deficit will be covered with a 1 percent surcharge over the next 10 years.

The new insurance law, which Gov. Jeb Bush signed into law May 16, also takes more than $240 million from the state coffers to set up a hurricane mitigation program.

That means homeowners can qualify for 50 percent matching grants to cover such upgrades as adding storm shutters or putting in hurricane-proof windows. Plus insurers are required to give homeowners discounts or credits for these measures. The savings for installing such upgrades could be as high as 40 percent of the annual premium. As premium rates climb, the savings will be significant.

A separate $7.5 million mitigation program for mobile and manufactured homes also will be set up.

Insurance regulators are required to set up a process to provide free inspections to advise homeowners on what steps they can take to make sure their homes fare better during a hurricane. Inspections will also be done to verify the improvements. But major hurricanes can still wreak havoc despite some of the strongest deterrents such as shutters and roof straps. After the storm, consumers should make sure their families are safe, protect their home from further damage and call their agent or their insurer's hot line to start a claim.

As some homeowners are learning after Wilma, claims aren't always settled easily or promptly.

Paul Berger, an attorney in Boca Raton who is already representing several homeowners battling their insurers, says claims can be reopened if an owner finds additional damage or the initial offer from an insurer isn't sufficient to cover repairs.

With prices for building materials and labor climbing dramatically after last year's hurricane season, many homeowners who were lucky to have seen adjusters shortly after the storms last year are now finding their claims settlement isn't enough to get the work done. Many are still waiting for contractors to provide estimates or begin the work.

If an insurer becomes unwilling to negotiate or both policyholder and company reach an impasse, consumers can request mediation. The service is provided by the state at no charge, using an outside mediator provided by the Collins Center for Public Policy.

The settlements are nonbinding. Homeowners can go to court if they don't like the final offer. To request mediation to resolve a dispute on a windstorm claim, call 800-22-STORM.

Consumers having problems dealing with their insurer can also file a complaint with the Department of Financial Services' Division of Consumer Affairs, also call 800-22-STORM.

State officials are tracking complaints carefully. The complaints are often the first sign of trouble with an insurer.

''Just because an insurer sent you a check, it doesn't mean the claim is closed,'' Berger says.