Florida, where insurers have been dropping coverage since Hurricane Andrew in 1992, is a good example of where this can lead. With an annual average of $1,460 per home, homeowners' premiums there are second-highest in the country (Texas, at $1,511 is first), according to the most recent data available, a 2010 report from the Insurance Information Institute.
"Florida's off the charts when it comes to pricing," said Mike McCartin, an Ashton, Maryland, independent insurance agent.
Several months ago, I saw my homeowners insurance go up over $500 a yr. After 4-5 phone calls to Allstate, they finally conceded and lowered the premiums back to where they were, but made me sign an affidavit relinquishing some coverage. I did...only because if they raised it that much this year when we haven't had a hurricane for 6 yrs., they'd do it again next year. I'll pay off my home and not carry any insurance if it comes to that. Then I'll bank the premiums myself in case of future damage. If your home is paid in full, they can't force you to carry insurance. It's not the best option, but enough is enough. We're insurance poor.