By Kerry Sanders Correspondent
NBC News
updated 8/12/2004 12:23:08 PM ET 2004-08-12T16:23:08

As hurricane season begins to pound its way home with the threat of Hurricane Charley and Tropical Storm Bonnie, coastal residents in Florida and throughout the southeast are frantically make preparations to ward off disaster. But even if the storm doesn't make landfall, they've likely already paid a tremendous price for living where they do.

In the hurricane zone homeowners live in fear, and this year, it’s not only the storm threat, it's the cost of hurricane insurance.

Kathie Hartie in Galveston, Texas, like others near the coast in her state, is paying an average of 75 percent more than just four years ago. Her insurance bill this year will be $3,500. 

“I've been here for 40 years. My family has owned this house and I would hate to not be able to live here because of the cost of insurance. Is it going to end? I don't know," said Hartie.

On the South Florida coast, the cost of insurance has spiked even more.

Nancy and Ed McCue are retired police officers who live in Cutler Ridge, Fla., about a half-mile from the water. They were hit with a 268 percent increase in their insurance costs this year.

The McCues explained how the huge increase came out of the blue and, inconveniently, just as they were retiring.

“If you’re going to reach into my pocket and take my money, you better have a very good reason for it,” said Ed McCue.

“Windstorm [insurance] is like paying for a car payment, but I don’t get to enjoy the ride,” he said.

Hurricane Andrew
Homeowners in Miami, even living up to six miles from the coast, have seen their insurance costs double.

Why? Hurricane Andrew 12 years ago was the costliest natural disaster in U.S. history.

The damage from the storm cost an estimated $16 billion and put 11 insurance companies out of business.

“Insurance rates in states like Florida, Texas and Louisiana have risen because the risk is much higher than was originally anticipated in the pre-Andrew era,” said Robert Hartwig, chief economist for the Insurance Institute in New York.

“Andrew was a watershed event for the insurance business worldwide. Even today it ranks as the number one most expensive natural disaster in world history,” said Hartwig.  

Residents fighting back
Residents and some politicians now ask: How much longer will they have to pay for Andrew?

“The thing that concerns me the most about it is we haven’t had a major event and we’re still paying higher rates and higher rates, so my concern if we’re paying these rates without an event what’s gonna happen when we have an event? Are we going to be able to afford to live here anymore?” said Hartie.

Sally Heyman, the Dade County commissioner, spearheaded legislation to get the insurance rates under control and get consumer input on the setting of rates.

"You know, poor planning, poor budgeting, bad investments — hoo hoo for them, but don't put it on the backs of innocent people who can't absorb five thousand dollars, six thousand dollar a year increases," said Heyman.

“The fact of the matter is, homeowners in Florida are not paying for Andrew, they're paying for the next Andrew, and with respect to the next Andrew, it's not a matter of 'if,' it's a matter of when," said Hartwig. 

Angry homeowners in Florida are retaliating by filing a class-action lawsuit that has resulted in a partial victory. Insurance increases will continue, but now at a slower pace.

But for the McCues, it may not be slow enough. With premiums higher than they ever expected, they still may have to move.

And Hartie is worried about how much longer she’ll be able to stay in her home and still manage the costs.

“I hope to retire fulltime and I want to be able to enjoy it and not spend every dime I have on insurance and taxes and be able to keep my home,” said Hartie.

Kerry Sanders is an NBC News Correspondent based in Miami.


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