The washed-out hotels, crumbled asphalt and shuttered businesses that marred Pensacola Beach after Hurricanes Ivan and Dennis in 2004 and 2005 are mostly gone - the debris hauled off and the damaged structures demolished or rebuilt.

But real estate agent John Pinzino still cannot find Florida mortgage loan applications for the homes and condos he has listed along this refurbished stretch of white sands and turquoise waters. Despite a hurricane-free 2006 and what he calls “a strict buyers’ market,” would-be beach dwellers are staying away, primarily because of soaring insurance rates in coastal areas statewide.

Only five of 354 residential properties on the market in Pensacola Beach sold in January. Pinzino lost one deal after the prospective buyers paid a deposit, but later discovered the $3,500 they had estimated for insurance would actually be $8,500.

“(Homeowner’s insurance) is a huge deterrent to anyone looking at buying property anywhere in our state. We have property for sale that normally would have been gobbled up but, because of the insurance situation, is just sitting,” Pinzino said.

Pinzino and others are counting on reforms signed into law after January’s special legislative session on insurance issues to make a difference. Many legislators say the session was a successful first round in Florida’s fight against an out-of-control insurance system, which has seen rates double and worse since the state was struck by eight hurricanes in 2004 and 2005. But they say more has to be done in the coming months to keep Florida’s economy out of a growing insurance quagmire.

Sen. Mike Fasano, R-New Port Richey, points to a spike in the number of residential Florida home loan foreclosures in the Tampa Bay housing market as proof of the dire need for insurance reforms.

“People can no longer afford their [Florida mortgage] payments because of their insurance premiums,” said Fasano, who has authored legislation that would provide grants to help low- and middle-income homeowners with insurance rate hikes.

Fasano is also pushing legislation that would require the state-created Citizens Property Insurance, Florida’s largest insurer, to refund the cost of private appraisals for homeowners whose insurance rates are later lowered.

Citizens customers can challenge rate increases by seeking a private appraisal. Fasano said the private appraisals sometimes show that Citizens’ rates are based on inflated property values.

“We made significant inroads in the special session, but we cannot stop. We must go further and make more gains. The governor has made his message clear to the insurance companies,” Fasano said.

The special session changes, supported by all but two of the 160 House and Senate members and signed into law by Gov. Charlie Crist, included an agreement to expand insurers’ access to Florida’s Hurricane Catastrophe Fund, which pays claims when insurers cannot.

Legislators took another swipe at insurance companies by trying to prevent them from dropping policies or leaving the state. The new laws require companies offering auto insurance in Florida to also offer homeowners coverage if they cover property in any other state.

Insurance companies aren’t happy with the changes.

The Florida Insurance Council filed a petition to stop the state from enforcing an emergency rule preventing insurers from filing for rate increases or cancelations before the new reforms take effect June. It withdrew the petition after the state said companies could still drop customers who had already been notified.

Sam Miller, executive vice president of the council, said state leaders are gambling on a mild 2007 hurricane season and Florida taxpayers will be asked to pay the bill if legislators are wrong.

“Some of these things will dramatically raise rates if another storm hits,” he said.

Whether the state should continue to allow Florida offshoots of major insurance companies - known as “pup companies” - will likely be another important issue in the upcoming regular session. Such companies have been allowed in Florida since 1996, four years after Hurricane Andrew destroyed much of Homestead and caused $30 billion in damage.

Companies such as Allstate Floridian carve out their Florida business into a separate company, insulating the parent company from losses in the hurricane-prone state. Crist has called the companies “a shell game,” which allows a company to claim major losses in one state even though they have made billions of dollars nationally.

Rep. Ray Sansom, R-Destin and chairman of the Legislative Budget Commission, predicted many insurance-related issues will be debated in the regular session.

“I don’t think anyone felt like the special session was the end of the discussion,” he said. “There are still a lot of decisions the Florida Legislature will need to make and discussion we will need to have.”

Meanwhile, Pinzino and other Pensacola Beach real estate agents say they’ll have to wait and see if the state’s efforts to lower insurance costs bring a turnaround in the slumping market.

“We think the special was very positive,” Pinzino said. “Interest rates are low, inventory is high, but word just needs to get out that the state is doing something to address insurance.”

Whether you currently hold a Florida mortgage loan or are thinking of applying for one, the following pieces of news could be discouraging:

- First, there were the news reports out of Florida that nine tornados, up to F3 in force, had dropped out of the darkness, seriously damaging or destroying 1,500 buildings and killing 20 people in the central part of the state.

- Next was a report from The Intergovernmental Panel on Climate Change, which effectively eliminated further discussion on the reality and cause of Global Warming. The Panel’s report stated that there is a 90 percent certainty that humans and their greenhouse gas emissions are causing warming and that global temperatures could rise by an average of 4.5 degrees by the end of the century.

How do these weather-related happenings and reports affect the Florida housing market? Read on.

News reports of the tornado damage brought a fiscal truth home to roost. Victim after victim, pawing through the wreckage of their homes, told reporters that they were uninsured, either because their insurance premiums had skyrocketed into the realm of unaffordable over the last few years or because their insurance had been cancelled outright.

Therein lays the danger to homeowners and maybe to the whole economy.

According to Ceres, a national network of investors, environmental organizations and other public interest groups, homeowners’ insurance coverage is at risk in coastal areas that have been hard hit by seven hurricanes in the 2004 and 2005. Ceres’ statistics include the following:

- FLORIDA: As of last March, 225,971 homeowners’ property policies were cancelled and 224,868 policies were not renewed for Florida home mortgage holders. About 489,418 new policies were written by both private insurers and Citizens, the state-operated high risk pool. Allstate Insurance had plans to let lapse about 120,000 policies in Florida by the end of 2006 following cancellation of 95,000 policies in 2005.

State Farm, the state’s largest insurer announced it would not renew 39,000 windstorm policies in 2006 and plans to cancel all master condo policies. Premiums were doubling for windstorm insurance in many parts of the state with owners of 1,500 sf. homes facing premiums of $10,000 for wind damage alone with total insurance costs of $13,000 and deductibles of up to $18,000.

So, what happens to a homeowner with a Florida mortgage who can no longer obtain homeowners’ or flood coverage?

Failing to carry coverage is generally considered an act of default on the mortgage, and while the lender is unlikely to start legal proceedings, it will probably “force place” coverage with a high risk insurer. This can be many times more expensive than traditional insurance and lenders will usually only arrange coverage for the amount of the mortgage and not insure contents or owner liability.

And what if you are buying or selling a house in an affected area? If you can’t find insurance you can’t get a mortgage. More likely, you will be placed in your state’s excess risk pools.

Citizens is expected to soon be the largest carrier in Florida and has been charged with inefficiency and even corruption. Some states are now considering or have enacted a surcharge and/or higher rates on privately issued policies to help fund their high risk pools. But, if weather-related claims continue at the pace of the last few years it is unlikely that even state and federal coverage will be sustainable.

Then what happens to the housing market?

Reactions to the Florida Legislature’s new homeowner’s insurance bill, designed to bring relief to homeowners, range from jubilant to pessimistic, but most agree that the bill’s complexities make its long-term efficacy hard to predict.

“I think it’s incredible,” said Keyes Co. President Michael Pappas. “Basically what our state legislators are saying is that it’s our responsibility to handle insurance for the people, and we are going to do it.

“This bodes well for [Gov.] Charlie Crist and his new administration. It’s a great signal that they have heard the cries and taken affirmative action to correct the situation. The [Florida real estate] industry will be a tremendous benefactor.”

“For homeowners, this will provide relief in the short run, but it doesn’t do anything to solve the long-term problem,” said William Welch, chair of the Department of Finance in the College of Business Administration at Florida International University. “If the rates come down, they’ll probably be able to afford to keep their house until the next big storm hits, and then the state will have to raise its rates to cover its losses.”

Supporters of the bill, which passed unanimously in the Senate and with just two votes against it in the House, say it will cut property insurance rates for those with private insurers by up to 25%, and up to 19% for those covered by the state-run Citizens Property Insurance.

Citizens will now also offer below-market reinsurance to private companies.

But the reductions depend on complicated computations, and whether it will truly have an effect on Florida mortgage holders in the long run is still open to question.

“If it delivers significant reductions in homeowners’ insurance bills, absolutely it will help the market. Anything that makes a house less expensive is a help,” said Beth Butler, vice president and sales manager at Esslinger Wooten Maxwell.

“But how much, and for how long? It will need to significantly affect monthly payments to have an impact. It’s hard to tell if this is a big rollback to 2004 and prior, because people took a big hit in insurance costs in the past two years.”

That’s unlikely to be the case, said David Dabby, principal of The Dabby Group, a valuation and consulting firm.

“Anything that reduces the cost of homeownership at a time when pricing is at a record high is good news for homeowners,” he said, “but this is not significant. If your premium is $3,500, your average saving will be about $800. That’s some help, but it’s not a big help.”

The high cost of real estate, insurance and taxes puts Florida at a competitive disadvantage, Mr. Dabby said. “If we have to pay an average of $2,000 more in insurance premiums,” he said, “that translates to something like $30,000 less in the value of the property, all other things being equal.”

But Mr. Dabby and Ms. Butler agreed that the bill is at least a step in the right direction.

In 1994, property taxes statewide took $32 out of every $1,000 the economy in Florida produced; today almost $44 of every $1,000 in productivity are eaten up by property taxes. During that period, the property tax burden per Florida household doubled from $1,500 to $3,100.

That’s a lot to cope with on top of Florida mortgage costs and insurance premiums that are already through the roof. But what do we do about it?

Marco Rubio is the speaker of the Florida House of Representatives. The West Miami Republican wrote the commentary below for the Orlando Sentinel, touching on the need to make property taxes and homeowner’s insurance affordable for Florida families and preserve the American Dream they’ve come to expect from this great state.

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For decades, families from all over the U.S., and the world, came to Florida to pursue the American Dream. In return for letting people pursue their dreams free from burdensome taxes, Florida experienced an era of unprecedented growth and prosperity.

Florida remains a land of promise, but we cannot ignore the threats that loom directly before us. The threat of unaffordable housing - caused in no small part by property taxes and property insurance - have created a cost-of-living crisis here in Florida.

This week, the Legislature has convened in special session to address the first part of this crisis, insurance.

The seven hurricanes that battered Florida over a 13-month period have left our insurance marketplace in shambles. During this special session, we hope to make comprehensive changes to our current homeowner’s insurance regulations.

We are going to advance innovative ideas in order to make home insurance more fair and bring back our private insurance market for more competition and consumer choice. Perhaps the most significant change would be to allow the state to sell more reinsurance to private insurers at prices below the market rate. In return, we should require insurers to pass those savings directly to consumers in the form of lower rates.

Addressing these issues will help to stabilize and hopefully lower the cost of Florida insurance. But addressing property insurance alone will not solve our crisis. We must also address the second threat facing our state: unaffordable property taxes.

The problems with Florida’s property tax system are numerous.

First, our property taxes have been growing faster than our ability to pay for them and have begun to slow Florida’s economic growth and inhibit housing affordability. Despite the Save Our Homes amendment voters added to our Constitution in 1992, property-tax revenues in Florida have been growing faster than personal income since 2000.

Since 2000, taxes have increased by 80 percent, compared with total personal income growth of 39 percent and inflation plus population growth of 32 percent over the same period.

In Orange County, government coffers have swelled by almost half-a-billion dollars between 2000-2004 - a 36 percent growth in government taxing and spending. Yet where’s the relief for those struggling every month to pay their Florida home loan?

Our system distorts the tax burden among different classes of property owners. We have limits on the amount that taxes can increase each year on homesteaded property, but there are no protections for rentals or commercial real estate, resulting in astronomical increases in property taxes.

Even homeowners who have benefited from Save Our Homes are under pressure from our property-tax system. Today, baby boomers who are downsizing to smaller homes, or young families needing a larger home because of a new baby, are likely to see their property taxes skyrocket if they move, even if they purchase a home worth less than the one they are selling.

Too many Floridians are literally trapped in their homes because of the tax burden they face if they sell their current home.

Some will argue that these increases are justified. Their rebuttals may be valid, but they are all immaterial. The bottom line is that when taxes, from any level of government, begin to rise faster than personal income, you have a recipe for economic disaster.

Government simply cannot provide more government than people can afford.

Patience is usually a virtue, but this is one issue I hope we are impatient about. Instead of waiting until the 2008 election, we should place comprehensive property tax reform on the ballot for a special election early this summer, so that Floridians will experience property tax relief this year.

The American Dream is still alive in Orlando and throughout Florida, but it is threatened by a cost-of-living crisis, and this crisis will not go away on its own. Left unresolved, it will make Florida increasingly like those states from which so many of our people fled.

The legislative process can be slow and cumbersome. Usually that is a good thing, but times of crisis require swift and bold action. That is what is required of us now. Working together - Republicans and Democrats, state and local governments - we can enact real reforms and protect the dream.

Often overlooked in the decreased demand for Florida home loans this year? The cost of homeowner’s insurance in the state.

Rising rates, the chief economist for the National Association of Realtors said Friday, could drive people away from the Sunshine State.

‘”There will be a whole new set of destinations because of the hurricanes and the rise in the cost of insurance,’ David Lereah said Friday at the NAR’s convention in New Orleans. ‘People are going to think twice about wanting to live on the water.”

A decade of severe hurricanes that have pounded the Florida housing market, the Gulf Coast, Louisiana, Texas and places up the Eastern coastline, has increased the price of homeowner policies and the difficulty in obtaining them, Lereah said.

“If we could sift out all the other problems (hurting home sales), the problem that will remain is the availability and affordability of insurance,’ he said. “Start in southern Florida and work your way up to Maine.”

In Florida, which has had 12 hurricanes since 1995, the cost on insurance has risen “tenfold,”Lereah said. Even if Florida mortgage rates remain low, these costs must be accounted for. They’re causing some families to leave the state, he said, looking for protection from the storms and the insurance costs.

“We’re talking people who lived there 20, 30 years,” Lereah said. “A lot of them are moving to the Smoky Mountains.”

The Realtors refer to them as “Halfbacks,” Lereah said. They don’t have an interest in applying for another Florida home mortgage under these circumstances.

In California people are seeking safety in Washington and Oregon, Lereah said.

Louisiana, which was hit by Hurricanes Katrina and Rita in 2005, is currently having problems getting insurance for home buyers. Agents say prices have shot up from $1,000 annually to $3,000 or $4,000 annually, putting a damper on home sales.

“I think we need for the federal government to get involved and create some sort of backstop,” Lereah said. “If you’re a private insurance carrier you think twice about getting involved in an area where there is not a backstop.”

The contract was signed, the Florida mortgage was approved and the buyer was set to close on the $299,000 home in Palm Beach County.

Then the first-time home buyer, on the verge of closing the deal, learned how much insurance would cost: $4,700 a year.

The big premiums pushed his monthly payment past the mortgage lender’s comfort level, and approval for the loan was yanked.

The botched sale is a scenario becoming all too common amid the state’s housing hangover, real estate brokers and affordable housing experts say.

Even as some sellers have lowered their listing prices, soaring insurance costs and real estate taxes have killed deals and sent buyers to the sidelines.

The owner of the house referenced above, which is located in Royal Palm Beach, struggled to find a buyer who could take the insurance premium and property taxes that accompany what would seem to be an affordable home in Palm Beach County’s pricey real estate market.

He eventually sold the home to a relative for an amount far below the list price, said Douglas Rill, the agent who listed the house. Rill calls taxes and insurance, once little more than an afterthought for home buyers, “a double whack on the head” — one that countless owners are starting to feel the pain from.

“It’s squeezing buyers. At least it’s not a triple whack. Insurance and taxes are going up, but prices are softening,” Rill said.

Those soft prices finally hit home when the Florida Association of Realtors said prices in once-sizzling Palm Beach County and the Treasure Coast had fallen 6 percent in August compared to a year earlier. Realtors hope that area sellers are finally facing reality after months of denial that plummeting sales and ballooning inventory foretold a weak market.

But is it too little, too late?

After two years of powerful hurricanes, insurance companies have doubled or even tripled premiums. Meanwhile, soaring property values are catching up with home buyers, whose tax bills are based on home prices — and go up along with home price appreciation.

Tax hikes, at least, are an expense homeowners can plan for. If you buy a home this year, its taxable value will adjust next year to something closer to what you paid for it. But how much property insurance bills will rise is anyone’s guess.

After her homeowners insurance premium more than doubled to $5,050 a year, Teresa Badillo of Boca Raton plans to cut modest donations she makes to charities. The costs of caring for her autistic son leave little room in her budget for unexpected increases.

“I have enough expenses. Anything added to our budget just kills us,” Badillo said.

Jo Nagorka of Tequesta got an even bigger shock from her insurer.

Her bill soared to a ridiculous $8,595 a year, and Nagorka is looking for a part-time job. The mother of a 10-year-old boy, she’s feeling the squeeze on both ends. As her ownership costs rise, her income as a part-time real estate agent has fallen, thanks to a Florida housing market that’s gone from red-hot to “dead as a doornail.”

Nagorka is counting the years until her husband, a teacher, retires so they can move to a cheaper part of the country.

“We’ll definitely leave Florida when he retires,” Nagorka said.

Many Florida homeowners with houses currently on the market hope to follow this example and make the move out of the state. But with home sales slumping, those sellers are finding it hard to cash out the real estate gains made possible by the soaring home prices of 2001-2005.

Experts see no end to the affordability crunch that began with soaring home prices. Now that prices have flattened, insurance and taxes are conspiring to price out buyers. Even when people can afford the Florida mortgage, they can’t afford the insurance and taxes.

Today’s dark mood is a stark contrast from the real estate euphoria of a year ago. In 2005, homeowners could scarcely believe their good fortune. Historically low-interest Florida mortgage loans sent sales (and prices) soaring as countless teachers, bartenders and handymen became overnight real estate speculators.

From May 2004 to May 2005 alone, the median price of an existing single-family home in Palm Beach County rose by $100,700. That means the typical homeowner added nearly $2,000 a week to his net worth for doing nothing more than paying their Florida home loan on time.

After the party ended — last call was in November, when home prices peaked — came the hangover. Sales slowed, prices flat-lined and the focus shifted to the twin budget busters of insurance premiums and property taxes.

In August, sales of single-family homes plunged 50 percent in Palm Beach County and dipped 48 percent in the Treasure Coast compared with the same period last year.

“It’s absolutely decimating people,” said Mike Dooley, President of the Florida Association of Realtors and a broker in Hobe Sound.

Dooley recently saw a buyer walk away from a $6,000 deposit on a $1 million home after he learned just how much insurance would cost. The 1-2 punch of insurance and real estate taxes leaves first-time buyers with little choice but to rein in their expectations.

“Buyers are coming in and lowering their sights. Someone who was looking for a $1 million home now might be looking for a $700,000 home,” Dooley said.

Paula Ryan, the director of West Palm Beach’s Department of Economic and Community Development, worries programs to help lower- and moderate-income buyers afford homes might only be setting up buyers for trouble… once the insurance and tax bills arrive.

No matter how much buyers earn, skyrocketing insurance bills easily can outpace their ability to pay. North Palm Beach insurance agent John Farr says he’s telling people to get insurance quotes before thinking about signing a contract on a home… otherwise, foreclosure could rear its ugly head.

“Be very careful about signing a contract with earnest money before you shop around for insurance. That can come as a terrible shock,” he said.

George G. Zimmerman, past president and CEO of three reinsurance companies and a resident of Sarasota, believes he knows how to fix the high insurance rates that have grown into a bona fide crisis in Florida.

As he tells the Sarasota Herald Tribune, predicting the weather a year in advance is of little consequence to the insurance market.

If meteorologists predict 20 storms, and 19 of them are steered into the open Atlantic, causing no loss to property owners, a study becomes a moot exercise.

The only “science” that exists in the insurance sector is actuarial science, and that applies to life insurance. All other forms of underwriting are an art.

The insurance market will, however, use studies to justify rate increases to the direct writers of property insurance, who pass obscene premium increases on to the area homeowners.
There are options to lower property insurance:

1. The state could cap rate increases at 10 percent a year. If the insurers refuse to write or renew homeowners, they need to take all business out of Florida, including the profitable lines of business such as casualty, life and even auto insurance.

2. Insurers should seek new reinsurance markets on a worldwide basis and not continue to renew with reinsurers who are trying to make up for prior underwriting losses. That way, Sunshine State homeowners already reeling from higher taxes and increasing Florida mortgage costs can get some measure of relief.

3. The State Legislature should consider allowing an insurance exchange to develop new capacity to underwrite all forms of indemnity here. This would function with individual investors becoming members of different Florida underwriting syndicates. Subscriptions would be processed by stock brokers, using Securities and Exchange Commission (SEC) guidelines.

The above options are complex and have a degree of risk attached to them. However, we are facing a serious and complex problem with no easy solution. Massive home price gains growth has pushed homeownership out of the range of many, even as Florida home loan rates remain historically low. Insurance can be the straw that breaks the camel’s back, or it can be reformed. It’s up to us.

Industry insiders don’t sem worried about the Florida home mortgage situation; demand should continue to increase as interest remains low and sellers are forced to lower asking prices.

When it comes to the real estate market and, ultimately, the economy, experts are more threatened by spiraling insurance rates, says a University of Florida researcher.

”The entire economy will have to adjust to these higher insurance costs,” said Wayne Archer, director of UF’s Center for Real Estate Studies, which recently completed a new quarterly survey of Florida real estate trends. “It’s a big enough hit, just like gas prices, that it will ultimately affect every business and every price that is property intensive.”

The unusually active 2004-05 hurricane season precipitated the higher rates. While these have already struck homeowners with Florida home mortgage loans and apartment owners - who are passing costs on to tenants by raising rents - commercial tenants have not been affected yet on a large scale, Archer said.

”The most dramatic increases will be in the cost of real estate, but consumer prices will also go up some, just as rising gas prices put pressure on costs across the board,” he said.

The insurance crisis was identified as the biggest trend in Florida’s real estate market in the center’s new statewide quarterly survey. Industry executives, real estate lawyers, market analysts, title insurers, financial advisers, market research economists, real estate scholars and other experts in the field from around the state were asked a series of questions by UF’s Survey Research Center in July.

The softening Florida housing market was the second most mentioned trend.

While 69 percent of the survey respondents expect condo prices to lag behind inflation or even decline, only 47 percent of the respondents were as pessimistic about single-family home prices, Archer said. Also, while nearly 70 percent expect a downturn in absorption rates - the rate at which properties are able to be leased or sold –61 percent expect the same pattern in single-family housing.

The recent explosion in apartment-to-condo conversions is beginning to slow and will slacken even more as the housing market continues to soften, Archer said. Sellers and developers will be taking it easy, as the leverage shifts toward buyers seeking a Florida home loan and reasonable purchase.

Tracy Casper, who lives east of I-95 in West Palm Beach, is livid because her wind insurance rate just jumped 194 percent to $7,443.

Ouch.

Like many other Floridians whose insurance coverage is now being assigned, her house got taken out of Citizens Property Insurance Corp. and put into Florida Peninsula Insurance, a company that just asked for an average 101 percent rate hike in Palm Beach County.

Tracy, a nurse married to a high school teacher, is not exactly rolling in money. So she that she and her husband have decided to drop home insurance coverage all together. Or, as the saying goes, “go bare.”

Many readers of this article, from today’s Palm Beach Post, are probably green with envy. Most homeowners, after all, don’t have the option of simply dropping their property insurance if it gets too pricey. Reason being? Most mortgage lenders won’t allow it.

“Most financial institutions will require you to carry enough insurance to protect their vested interest in the property,” said Tami Torres, a Florida Department of Financial Services spokesperson, who acknowledged that more and more people are looking into ways out.

Tracy said they’ve made lots of improvements to the house and figure it won’t get hit with significant damage. They’re willing to take the risk. But can they?

The rule of thumb has always been that, if you have a Florida mortgage loan, insurance is a requirement, not merely a suggestion or luxury item. But Tracy shows that it never hurts to ask. She and her husband still have a home loan, sure enough, but she says their mortgage provider signed off on the plan.

Going bare isn’t a decision you make lightly. You could be on the hook for your biggest asset, and need to determine if your house — and wallet — can weather a storm without any coverage. Then you need to decide if you can stomach that kind of risk.

It sure sounds like a dangerous gamble, but when wind insurance costs skyrocket, many people naturally start wondering if its worth paying 400 percent what they did a few years prior. Officially, the state of Florida doesn’t recommend you go bare. But if you’re going to do it, Torres suggests you at least get your lender’s approval in writing.

Despite the risks, people have been predicting for months that the South Florida housing market would be inundated with dropped insurance plans as tens of thousands of retirees aren’t in possession of home loans and thus required to buy coverage. The fact that property tax bills — for which there are no means of simple opting out — are also soaring makes the insurance premiums that much more tempting to dump.

What about you? Have you dropped your insurance? Would your Florida home mortgage provider even allow it? Do you know someone who has confronted this situation, for better or worse? If you haven’t thought about it until now, chances are you will in the months ahead.

Now that you’ve been approved for a Florida home mortgage loan, have found the house of your dreams and agreed on a purchase price, you’re gonna have to sign up for a home insurance policy at some point.

It’s not a difficult process, but it can be similar to car insurance: homeowners must worry that making a claim could cause them to be dropped by their insurer.

If this takes place, it can mean higher premiums with another insurance company or, if you’re deemed troublesome, with your state’s high-risk pool. It might even mean no coverage at all. You’ll also lose any loyalty or claims-free discounts you earned under your present coverage.

Understanding your home insurance

It would be easy to know whether or not a claim will get you in trouble if there were a firm rule for when or why an insurer will drop coverage. But there isn’t. Even one or two small claims can sometimes do the trick. That’s especially true if the claim is water-related, which could mean mold in the future, writes Kimberly Lankford, a Kiplinger’s magazine columnist, in her recent book “The Insurance Maze.”

As you’d expect, mold is a major issue in regions around the state. Those with a Florida mortgage loan need to be careful about using their insurance on the issue.

“What an underwriter gets concerned about is claim frequency,” says Chris Heidrick, vice president for personal insurance with Firemen’s Fund. “It starts to raise questions.”

Even inquiring about whether to make a claim can hurt your reputation, threatening the costs of your premium or policy in general, says Lankford. Some companies will count such inquiries against you in a central database that other insurers can access.

You can check the industry’s database, known as the Comprehensive Loss Underwriting Exchange, once a year for free, similar to receiving a getting a credit report for your home. The database will list your current and former addresses and any claims you’ve made.

If you are dropped, there are some steps you can take.

The longer you’ve been with an insurer, the more they’ll want to retain your business. Start by asking your agent or the insurance company what you can do to get back in their good graces, by replacing a leaky roof or aging boiler or by raising the deductible substantially. The money you save by not switching insurers could be well worth it.

If they refuse, shop around or try an independent insurance agent who can tell you your options. A last resort may be your state’s high-risk insurance pool, usually called a FAIR plan, but you could face high premiums and low damage caps. You should try to avoid tacking on any high costs to your Florida mortgage loan as much as possible.