New York in Insurers' Hurricane Zone

Edward B. Rust Jr., chairman and chief executive of State Farm Insurance Co., the nation's largest personal property and casualty insurer, used Hurricane Andrew as an example. In 1992, a subsidiary of the Bloomington, Ill.-based company, State Farm Fire & Casualty, was the top insurer of homes in the country. Claims from Andrew consumed the accumulated profit since its founding in 1935.

"That's what these low-frequency but high-severity events can do. They eat up not just profit, but all the accumulated capital," Rust said. "And I'm not talking about just policies in Florida, but in Seattle, in North Dakota, in Maine, in New York."

Insurance companies reported a record $43 billion profit in 2005 -- an 11.7 percent increase over the previous year and the highest net income since 1991, according to the Insurance Information Institute, a trade group.

But insurers say profits tell only half the story: The property-and-casualty insurance industry was able to weather the huge losses resulting from Katrina because they were themselves insured. Half the $58 billion in insured losses resulting from last year's hurricanes were absorbed by reinsurers, companies that insure insurance companies, according to the institute.

Those reinsurers are now sharply increasing their rates in all coastal areas, making it far more expensive to do business there.

Last year's record profit is also the fruit of the insurers' 14-year effort to insulate themselves from risk, beginning in 1992 when numerous insurers quit writing wind coverage in Florida. Two years later, the Northridge earthquake changed the landscape of earthquake coverage. Later, there were wildfires, mudslides and floods.

After each successive disaster, the industry added fine print to its policies, excluding more from baseline coverage.

Increasing numbers of homeowners turned to state-run insurance pools, designed to be the insurer of last resort. Yet the Florida pool, known as Citizens Property Insurance Co., receives 40,000 new applications a month. With 850,000 customers, the pool is soon expected to overtake State Farm as the state's largest insurer.

Up and down the East Coast, even those who are able to find insurance are finding they're now paying more for less.

For 23 years, New York attorney Tom Talley insured his vacation home in the Hamptons for about $900 a year. This year, he decided to sell the residence and signed a contract to buy a different Hamptons home, a deal that nearly went sour when he almost failed to find insurance.

"I became panicked," said Talley, 62, who found a carrier the day before his closing, paying triple what he paid before. He's also getting less coverage: The policy -- like many being written on the coast these days -- includes a 2 percent hurricane deductible.

"The box of what type of risk they're willing to allow is getting narrower and narrower," said agent George Yates, an independent agent who sells insurance on Long Island and in the Hamptons.

Marie Collins says she understands the risk. In the 1920s, she planted a maple seed in her window box. It grew into a majestic tree, only to be toppled by a hurricane that hit Brooklyn before World War II.

Her issue is loyalty: The house has been insured for 81 years, during which she's never put in a claim. It has been insured by several carriers during that time and by Allstate for the past three years.

"I've been their customer for years," she said of Allstate. "That should count for something."