Private insurance companies should either sell windstorm coverage for coastal Florida homes or allow Citizens Property Insurance Corp. to issue one policy covering all the risk for those houses, under a recommendation discussed Thursday by members of a state insurance committee looking for ways to fix Florida's insurance market.

Allowing state-backed Citizens to collect premiums to cover fire, theft and liability along with the more expensive hurricane wind risk could mean millions more for the nonprofit company's coffers and make policies less confusing for customers, Citizens Executive Director Bob Ricker told members of the Property and Casualty Insurance Reform Committee during a meeting at Florida International University in west Miami-Dade County.

Many customers who live in the high-risk areas -- generally east of Interstate 95, or east of U.S. 1 in northern Palm Beach County -- buy their hurricane coverage from Citizens, but get the rest of their homeowner insurance from a private insurer. So many homeowners have two policies to insure their homes, or three if they have a separate flood policy from the federal government.

The idea of letting Citizens issue full policies in the high-risk areas came under fire from insurance industry representatives. They argued it makes no sense to expand Citizens, which is supposed to be the insurer of last resort for Floridians seeking home or condo coverage but has grown to the largest home insurer in the state.

"It sounds to me that what's being considered is we want to make Citizens bigger so we can make it smaller," said Joe Formusa, president of State Farm Florida Insurance Co.

State Farm Florida wouldn't be willing to cover hurricane risk in coastal areas, Formusa said. So Citizens would take on more risk it doesn't currently insure.

Ricker said letting customers in Citizens' high-risk areas have one homeowner policy is "a customer service issue, but it also will give us arguably hundreds of millions of dollars in net income that we drop right into surplus and store up, tax-exempt."

The extra premium Citizens would collect for the fire, theft and liability coverage "doesn't go out to another state, another country, it doesn't go out to dividends, it doesn't go out to CEO bonuses," Ricker said. "It stays in Citizens and accumulates."

Last week, Citizens' board approved a 2.07 percent one-time extra charge on all home, condo and commercial property insurance policy holders to make up for part of a $1.7 billion shortfall from 2005. The assessment works out to $20.70 on every $1,000 of annual premium. It's on the heels of a 6.8 percent extra levy -- $68 per $1,000 in annual premium -- the state's policy holders paid to cover Citizens' deficit after the 2004 hurricane season.

The insurance committee, led by Lt. Gov. Toni Jennings and whose members include state elected officials and business representatives, is expected to make a series of recommendations to the Florida Legislature before Nov. 15. Legislators will then use those recommendations as a starting point, as they attempt to overhaul the state's hurricane-battered property insurance market.

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