Pay now or pay later?

Relief from rocketing insurance rates is on the way.

But curb your excitement. You will pay later.

Many of the proposals to be deliberated on during this week's special session of the Legislature would pass more risk from insurers to consumers and the state of Florida.

That means the tab would be deferred until a major storm hits. Then all Florida residents would pay, through hefty surcharges on insurance policies or higher taxes.

''What we're doing is providing a short-term fix, which is great for consumers,'' said Michael Keeby, senior vice president of HBA Insurance Group. ``Long-term, what's going to happen is that [this crisis] is going to kill our economy.''

Since lawmakers wrapped up the 2006 legislative session last May, the state's insurance crisis has rapidly worsened. Insurers demanded outsized rate increases, doubling and tripling premiums for many homeowners. They also dropped tens of thousands of policies, many held by longtime customers. Some commercial carriers dropped out of Florida, leaving businesses scrambling for coverage at any price.

Beginning Tuesday, lawmakers go back to their chambers. Gov. Charlie Crist says he will accept only new legislation that lowers rates. He is optimistic that the Legislature will deliver.

''We must mandate meaningful and broad-based rate relief for our homeowners,'' he said late last week.

One way to provide rate relief quickly -- a measure that will most likely pass because it has broad support -- is to expand the state's catastrophe fund so insurers could buy a bigger chunk of less expensive backup insurance. Insurers would pass the savings on to policyholders.

It's considered a good plan, but not one without risks.

If a Category 5 hurricane hits a densely populated area of the state, say South Florida, the Florida Hurricane Catastrophe Fund would blow through its $15 billion capacity and taxpayers would foot the rest of the bill.

''There is no question that the state will assume more risk,'' said Rep. Dan Gelber, a Democrat from Miami Beach. ``The issue is how to provide the most responsible way to deliver rate relief.''


Indeed, several consumer-oriented proposals that could pass in the special session first emerged in a task force led by former Lt. Gov. Toni Jennings. They include allowing homeowners to buy less coverage, perhaps just enough to cover their mortgages, or take on bigger deductibles, or forgo windstorm insurance entirely. All those proposals provide substantial instant savings on annual premiums.

But again, much more risk. Homeowners would pay a bigger portion of the repair bill after a storm.

''Pay now or pay later. That's a decision you will have to make on behalf of Florida's residents,'' Mark Delegal, a lobbyist for State Farm Insurance, told a Senate committee last week.

There is also a consensus on some proposals that could lower rates for homeowners covered by Citizens Property Insurance, the state-run pool, and some broader measures, such as:

''We've been having insurance discussions since October. We have a lot of agreement,'' said House Speaker Marco Rubio, a Republican from Coral Gables.

The Senate has a 153-page bill on the table. The House has outlined as many as six bills that will tackle its goals.

Both the House and Senate have proposed bigger changes in how Citizens operates. For instance, the Senate is considering allowing Citizens to write policies to cover all potential home damage, including fire and theft. Such a move would essentially eliminate the state's designated windpool area. Also, by expanding its lines, Citizens could be more profitable and avoid future hefty premium in increases.

But this proposal is strongly opposed by House leaders, who would rather replace Citizens' board of directors and impose new management controls to improve its performance before allowing it to offer other insurance products.

The House includes two proposals made by Gov. Crist on the campaign trail last year that the Senate is now resisting: preventing the formation of Florida-only subsidiaries for national insurers that operate in the state and demanding that insurers sell homeowners insurance in Florida if they do so outside the state.

Another point of contention this week will be whether the House will accept a Senate proposal for a super insurance fund that would cap the amount private companies pay out in a one-in-75-year storm and dip into state revenues for the remainder. House leaders warn that such a plan could shield insurers from the most costly risk and could lead to major cuts in the state budget or tax increases.

Unlike two past legislative sessions where lawmakers easily accepted the rationale proposed by insurance companies for favorable law changes, there is tough talk in Tallahassee.

''Lawmakers won't be as flat-footed this time,'' said Sen. Bill Posey, a Republican from Rockledge who leads the Senate Banking and Insurance Committee this year.

On the agenda are provisions to make insurers more accountable: having the companies' chief executive officers sign off on rate filings; requiring state regulator approval of rate hikes before they are implemented, and providing more power to the state's insurance consumer advocate to represent consumers.


Already, insurers are complaining about some measures.

''Making CEOs sign off on rate filings and eliminating the windpool don't produce any benefits for consumers and make it harder to do business in Florida,'' said Delegal, the State Farm lobbyist.

To keep lawmakers focused on the interests of homeowners, not insurers, consumer activist groups plan a huge rally Tuesday on the Capitol steps.

Throughout the state, about a dozen groups have been formed in the past year, questioning rate increases and demanding accountability. One group, FIRM -- Fair Insurance Rates in Monroe -- has already won a rate rollback for one year.

Business owners, too, will be tuned in to Tallahassee.

Said Richard Barkett, who heads the Realtor Association of Greater Fort Lauderdale: 'Taxes and insurance are now the No. 1 concern when a buyer is coming in nowadays, especially a first-time buyer. It used to be location, location, location. Today, it's `What's my bottom line?' ''

As lawmakers approach their work this week, they have realized, often personally, that the act of buying property insurance in Florida changed drastically after the 2004 and 2005 hurricanes.

''I didn't have shutters until two years ago,'' Sen. Posey said. ``I would say that's what I have insurance for. But those days are over.''

Miami Herald staff reporter Mary Ellen Klas contributed to this story. d