Tracy Casper felt ill Mother's Day weekend.

While plenty of people will remember opening sentimental cards, Casper remembers opening her windstorm insurance renewal notice. Her premium had skyrocketed 194 percent to $7,443.

"I almost threw up," she said. "We called our agent. They weren't very sympathetic."

Casper and her husband, Joseph Gushanas, don't live in an extravagant mansion on the water. They bought their 2,800-square-foot West Palm Beach home east of Interstate 95 almost 10 years ago for $165,000.

She's a nurse; he's a high school teacher.

Unlike many Florida homeowners facing huge hikes in their insurance rates in the wake of recent hurricanes, Casper and Gushanas have decided to drop their windstorm coverage rather than pay the huge bill from their insurer, Florida Peninsula Insurance Co.

Most lenders require homeowners to have insurance, but Casper said her mortgage company approved the plan.

"We've spent thousands of dollars improving our home years ago. Our feeling is the risk is really low that our damages will be beyond $7,443," she said. "We're willing to take the risk."

The couple is still thinking of moving away, however, either to North Florida or Oregon.

"We feel so trapped," Casper said.

'A financial blood bath'

Tens of thousands of homeowners across Palm Beach County and the Treasure Coast are feeling the same way as they open up their renewal notices this spring.

Home repairs from two years of storm activity have worn down their patience, as well as their bank accounts.

But state insurance regulators recently approved a spate of double-digit increases, and homeowners are left with few alternatives except to pay as they are slammed with a new wave of rate hikes just as hurricane season bears down on them.

Beleaguered homeowners have heard the reasons for high rates again and again.

The market is tight. Eight hurricanes have hit Florida in two years, and weather experts predict another active storm season.

And the price of reinsurance, or insurance for insurance companies, has skyrocketed — a cost that insurers want to pass on to their customers.

Customers are feeling rate pain right now for a couple of specific reasons:

• Insurers' reinsurance policies come up for renewal on June 1, meaning many of them want to have higher rates in place before they negotiate their new contract.

• Some insurers filed for higher rates after the beginning of the year when they realized construction costs were rising. Since regulators can take up to 90 days to rule on filings, a lot of those requests are being approved now.

"There's a strong sense of urgency now and a sense that the (Florida) Office of Insurance Regulation would have a large number of filings," said Robert Hartwig, chief economist for the Insurance Information Institute, a New York City-based industry group.

"They want the rate to be reflected as soon as possible because Florida's been a financial blood bath for homeowners," he said.

Some homeowners, like Casper, are frustrated and willing to take extreme steps to lower their rates, like raising their deductibles, reducing the value of their homes or even leaving the state.

"Now everyone is suddenly aware of when their renewal time is," said Sandy Greenberg, president of the Coalition of Boynton West Residential Associations. "So everyone's afraid to open their mail from the insurance company."

They should be. Insurance regulators have approved eight rate increases since March that impact Palm Beach County and the Treasure Coast, seven of which resulted in double-digit hikes as high as 60 percent for customers.

That includes the hefty 42 percent average statewide hike on May 19 for Citizens Property Insurance Corp. customers who live in the high-risk pool.

As of Thursday, 21 more rate hike requests that impact this region were pending, with nearly all of them at least double digits.

And two of those are triple-digit hikes for Palm Beach County customers:

• 101 percent from Florida Peninsula, an insurer that takes policies out of Citizens;

• 127 percent from State Farm.

Some customers already are paying these rates because of a provision that lets insurers start collecting them before they're approved.

Florida Peninsula, for example, will start collecting its higher rates for renewals on June 15. State Farm will wait until Sept. 1.

Insurance regulators confirm that they've seen a jump in the number and size of rate hike requests this year.

Insurance companies are required to file their rates with regulators at least once a year to raise, lower or maintain rates.

Companies can file as many times as they want.

"In the past it wouldn't be uncommon to go a year or two without changing their rates. Obviously we're not living in those times any more," said Bob Lotane, spokesman for the state Office of Insurance Regulation. "Definitely the rates are higher than we've seen them in some time."

'Nothing goes down in price'

What homeowners find particularly painful and galling is to pay a sky-high insurance bill on the eve of hurricane season, perhaps while still looking at a tarp-covered roof or a mangled pool cage.

"I've heard the most chatter from people who still haven't settled claims for last year. And they get a renewal notice, and they have to pay while the insurance company owes them money," said Sheri Scarborough, president of the West Boca Community Council. "They're concerned because they haven't settled last year's repairs. They've used all their savings."

Nancy Sutthoff had to dip into her nest egg to pay for a new roof on her home west of Boca Raton after Hurricane Wilma.

Federated National Insurance Co. finally reimbursed her about three weeks ago. In the meantime, the company hit her with a 17 percent rate hike in February when her policy renewed, bringing her insurance bill to $2,763.

Sutthoff is unsure how much more she can take.

"I'm afraid in a year or two we won't be able to afford to live here because we can't afford insurance," she said, adding her family probably would move to New Zealand, her husband's native country. "When I moved here from New York, it was a bargain to live here. Now it's as expensive, if not more."

Annette Day and her husband, Edward, retired and moved to Port St. Lucie in July. They already have been hit with a rate hike.

In the past year, the insurance on their 1,880-square-foot house jumped 28 percent.

The Days now pay $1,400 to St. Johns Insurance Co. — far less than a lot of people but much more than the $850 they paid to insure their house in Leesburg, Va., which was twice the size of their current home.

"It's not affecting us terribly now, but everything goes up, and someday it might be a nasty blow," Annette Day said. "Nothing goes down in price."

Many retirees who have lived here longer than the Days feel the squeeze now. Greenberg said in neighborhoods west of Boynton Beach, which are filled with retirees on fixed incomes, people are making adjustments to their lifestyles, as well as to their insurance policies, to soften sharp increases.

She said some homeowners tried installing shutters but learned that the discount they got from their insurer was not great.

So now they're increasing their deductibles and dropping the value of their homes on their policies — two moves that may put them in a tough spot if they incur hurricane damage.

"If you can't afford an increase," Greenberg asked, "what can you do?"

_______________________________________________

By Stephanie Horvath
Palm Beach Post Staff Writer

Copyright © 2006, The Palm Beach Post. All rights reserved.