House Speaker Allan Bense, R-Panama City, said Wednesday he expects the House to approve paying off at least part of the projected $1.7 billion deficit that Citizens Property Insurance Corp. faces from the 2005 hurricane season.

Senate President Tom Lee, R-Brandon, and Gov. Jeb Bush said they also are open to the idea, so long as lawmakers do a broader overhaul of the property-insurance system.

If lawmakers do not cover part of the deficit, policyholders throughout the state -- including those who are not Citizens customers -- will get stuck with the bill. Similarly, Citizens' losses during the 2004 hurricane season forced property owners to pay a one-time 6.8 percent charge.

Bense said it is unclear how much the House will agree to spend on the deficit, but he likened the idea to giving a tax cut to property owners. Citizens writes policies in coastal and other high-risk areas where private insurers refuse to do business.

"It's an indirect tax cut; that's how I interpret it," Bense said.

The discussions about covering Citizens' deficit came Wednesday as lawmakers continued trying to come up with plans to reform a property-insurance system that was hammered during the 2004 and 2005 hurricane seasons. With losses topping $30 billion from those two years -- and more dangerous hurricane seasons predicted -- insurers have sought dramatic rate increases and dropped tens of thousands of customers.

Also this week, Bush and the state Cabinet approved a plan that will lead to an average 2.8 percent increase in property-insurance bills to help cover deficits of the Florida Hurricane Catastrophe Fund. That state program provides a crucial form of backup coverage, known as "reinsurance," to private insurers as a way to help them handle hurricane losses.

The challenge for lawmakers in the coming weeks is to find a way to keep private insurers from fleeing the state, while also making property insurance affordable for homeowners and businesses. Reforming the system is crucial in a state that depends heavily on building, with Lee saying Wednesday the "sustainability of Florida's economic development is at stake."

Lawmakers also face pressure from voters who are seeing their insurance bills soar or who are losing policies. Rep. Dorothy Hukill, a Port Orange Republican whose district stretches from the ocean to West Volusia, said she hears concerns from constituents about the availability and affordability of insurance.

"They're having trouble east of (Interstate) 95, and especially mobile-home owners," Hukill said.

The Senate Banking and Insurance Committee worked Wednesday on a proposed 108-page insurance bill, and the House is considering a similarly wide-ranging measure. Key parts of both bills are aimed at reforming Citizens, which was designed as a last-resort insurance program but had grown to more than 815,000 policies at the end of February.

The House and Senate are looking for ways to reduce Citizens' future risks, such as preventing million-dollar homes from getting coverage through the program and charging higher rates for non-homesteaded properties, such as vacation homes. If owners of million-dollar homes could not buy insurance from Citizens, they might have to pay far more to get coverage from unregulated companies.

Citizens ran up a $515 million deficit because of the 2004 hurricanes, which forced it to impose the 6.8 percent charge on property owners throughout the state. That led to situations where residents of inland areas, such as DeLand, helped cover losses in oceanfront areas.

It remains unclear how much property owners could be charged to cover the $1.7 billion deficit from 2005, but the total would be at least 11 percent, said Justin Glover, a Citizens spokesman. For a policyholder who pays $1,500 a year for insurance, an 11 percent increase would translate into an extra $165.

But with the state flush with tax dollars this year, lawmakers could at least reduce that amount by covering part of the deficit.

jim.saunders@news-jrnl.com

Going Up

First, you've been hit with skyrocketing home insurance premiums -- if you're lucky enough to still have a policy. Adding insult to injury, the state has added surcharges to homeowners' policies to help cover hurricane losses for Citizens Property Insurance -- the state's insurer of last resort. This week, Gov. Jeb Bush and the state Cabinet approved an additional charge to bail out the Florida Hurricane Catastrophe Fund. For a homeowner with a $1,000 insurance premium, the surcharges would add up to more than $200.

2005 Citizens -- 6.8 percent

2006 Citizens -- at least 11 percent*

2006 Catastrophe Fund -- 2.8 percent

*Projected to go into effect this year.

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