Homeowners Gamble on Hurricane Insurance

June 1, 2006 — -- Call it the hurricane gamble, Florida's version of Russian roulette.

Lidia Schwartzbaum knows it all too well. Last year, she watched her home-insurance premiums double. She just got this year's bill, which is $14,000 -- another whopping increase, courtesy of eight hurricanes that battered the United States the last two years.

After $72 billion in claims, the home-insurance industry is running for cover -- in Florida. Twenty-five insurance companies have either pulled out of the state or limited new policies. Allstate, which dropped 95,000 policies last year, said it would not renew 120,000 policies when they come up later this year.

The problem isn't just in Florida. Allstate is not writing new policies in 14 Texas counties. "Insurance anxiety" has even spread to the Northeast. MetLife and Allstate say they will not write new policies in Long Island, N.Y., where there hasn't been a hurricane since Bob hit in 1991.

Even those who still can get insurance are facing big problems and big bills. In Florida, State Farm is asking regulators to approve premium increases of 59 percent for almost 1 million customers.

All of this has hit home for Schwartzbaum. She has weathered 29 hurricane seasons in her Miami Beach home. She is contemplating going without wind insurance for her 30th hurricane season. That would mean she could save almost $10,000.

Even if she paid her premium, Schwartzbaum realizes she'd still have a $10,000 deductible to meet before she could file a claim.

"I might not renew it," she said. "I might completely do without."