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Property owners in Florida, New York and Texas facing increased hurricane premiums

Not only are premiums rising but the type of coverage offered is changing and more property owners are being dropped completely as insurers try to limit their exposure in high-risk areas.

Hurricane property insurance premiums are up about 3% percent nationwide and more in some coastal areas where the potential for damage is greater, according to the Insurance Information Institute, a New York-based industry group.

Several factors are affecting premiums and coverage, including the $26 billion that insurers paid out on catastrophic losses last year from hurricanes Gustav and Ike. They have also been pushed up by the impact of financial market turmoil on the companies' earnings. Changes in state regulations are also driving some premiums higher.

Allstate Corporation and State Farm Insurance Company, two of the nation's top home insurers, have raised premiums in several states claiming that the increase was needed to offset a rising number of claims.

Allstate has also implemented policy changes and stopped offering coverage in high-risk coastal areas, including downstate New York. 'We continually review all those items and make the necessary adjustments,' said an Allstate spokesman.

Meanwhile, State Farm Florida is trying to pull out of the Florida market after the state denied the company's request for a 47% rate increase. Company officials have said they need the increase to remain financially viable. Discussions with regulators are continuing.

The moves follow several years of high payouts. They paid out $23.7 billion in claims on Hurricane Andrew in 1992. Hurricanes Ivan in 2004 and Katrina in 2005 forced several to pull back further, with many companies re-evaluating policy coverages and raising rates. Ivan caused more than $8.1 billion in losses.

'Over the last five years, where we've seen record catastrophe losses in coastal areas including Florida, Mississippi, Louisiana and Texas, the increases in those areas have outstripped what we have seen nationally,' said Bob Hartwig, the Insurance Information Institute's president.

Florida is ranked as the state with the greatest hurricane exposure followed by New York and Texas. The National Oceanic and Atmospheric Administration has predicted nine to 14 named tropical storms this year including four to seven hurricanes.