TAMPA -- William Tamayo renewed property and casualty insurance for his Tampa roofing supply company in August, a month before the terrorist attacks on New York and Washington triggered jarring premium increases.

Then Tamayo tried to negotiate a new health care policy for his 150 employees at Suncoast Roofer Supply. He wound up paying 17 percent more for less coverage than the old plan.

"Had I just kept the same (coverage), it might have gone up 30 percent," he said.

Whether you're protecting your chief executive from lawsuits or an entry-level employee from injuries, expect to shell out a lot more money for all sorts of insurance in 2002. On average, companies will pay 30 to 50 percent more for coverage in 2002, according to the Insurance Information Institute.

It's even worse for terrorist-prone industries such as airlines. Underwriters have raised premiums 200 to 400 percent.

"This is not a competitive market for the near-term because of the way insurers reacted," said Bob Hunter, insurance director with the Consumer Federation of America.

Florida homeowners and businesses have been through insurance rate hikes before. After Hurricane Andrew, dozens of insurance companies abandoned the Florida market or significantly cut the number of homeowners policies they were willing to write. Similarly, a flood of nursing home suits in the 1990s scared many insurers out of the nursing home market.

California went through the same thing after the Northridge earthquake and the Los Angeles riots.

"There's an old saying in the insurance business: No underwriter ever got fired for saying no," Hunter said. "Whenever there is a question mark, there is a tendency for insurers to pull back."

Property insurance was already becoming more expensive this year because of higher construction costs and more expensive claims. Then came Sept. 11. PricewaterhouseCoopers last week estimated the attacks at the World Trade Center will cost the insurance industry $50-billion to $70-billion. Up to $25-billion of that involves insured property damage with the rest a mix of life insurance, liability, business interruption and workers' compensation.

The consulting company also said it expects $15-billion in new capital to be pumped into the industry as investors and established insurers aim to capitalize on higher rates as a result of the attacks.

Property insurers are seeking help to lower their risk.

Four insurers with a relatively small market share in Florida -- Ace American, Federated Mutual, Universal Underwriters and Capacity Insurance -- have filed with the state to exclude terrorism coverage as part of their policies. Several other larger companies might do the same.

Florida Insurance Commissioner Tom Gallagher has not responded to the requests. But insurance department spokeswoman Tami Torres said Gallagher is urging the companies to avoid any "wholesale exclusion" of terrorism coverage until Congress acts on the issue.

"We're looking for Congress to take action by January," Torres said.

Gallagher's office hopes Congress follows the approach Florida took to shield itself from hurricanes: establishing a catastrophe fund that would act as a backstop to cover heavy losses rather than a bailout for insurance companies.

The U.S. House on Thursday approved a measure that would require the federal government to come to the industry's rescue whenever insurers had to pay more than $1-billion as the result of a terrorist attack. In that case, the government would cover 90 percent of payouts up to $90-billion but the insurers would be required to reimburse the government. The Senate is considering legislation that would confer direct payments to the insurance industry rather than loans.

Regardless of the plan selected, consumers may get little reprieve.

"Terrorism coverage will invariably result in higher premiums, regardless of the proposal that is adopted," said Martin Weiss of Weiss Ratings Inc.

If the government helps pay the terrorism claims, that could sweeten the pot for insurers. They could sell terrorism policies now and collect from the government later if another incident occurs. "The insurance industry is not a risk-taking industry, contrary to what people think," Hunter said. "It's a risk-spreading industry."

The current pain extends far beyond property insurance:

Workers' compensation insurance, for instance, was becoming more costly before September because of higher medical costs. The terrorist attacks gave workers' comp companies added incentive to raise rates.

"Something happened on Sept. 11 that no one ever contemplated and that's that workers, thousands of them simultaneously, can be the targets of terrorists," said Bob Hartwig, chief economist with the Insurance Information Institute in New York.

Insurance to cover corporate officers and directors has risen more than 45 percent. The driving factor: shareholder suits filed after the stocks of many tech companies fizzled despite glowing reports by the corporate executives.

Aviation-related businesses are grappling with higher rates in everything from equipment to liability to business interruption.

Bayflite, a subsidiary of Bayfront Medical Center in St. Petersburg, saw insurance costs rise 25 percent on the four helicopters it leases from Rocky Mountain Helicopters in Provo, Utah. That amounts to an increase in insurance costs of about $300,000 per year for Bayflite's fleet.

"Underwriters have the right to give notice of seven-day cancellation in event of a terrorist act or an act of war," said Leslie DeWald, president and chief executive of Aviation Insurance Services in Park City, Utah. "And that's what happened to every aviation policy in the world on Sept. 11. This industry had been in recovery mode prior to 9/11 and this has been quite devastating."

Despite all the doom and gloom talk, the insurance industry says its customers have it better than they realize.

"Even with these increases, the typical business will be paying about the same for insurance as they were in 1992," Hartwig of the insurance institute said. "Over a decade, the cost of insurance relative to revenues is virtually unchanged."

In 1992, businesses paid about $8.30 out of every $1,000 in revenue for insurance, according to a study by Prudential Securities. That benchmark dropped to $5.20 by 1999 before reversing course. It rose to $5.89 in 2000, $6.88 in 2001 and will likely push $9 next year.

But consumer advocates, including Hunter of the Consumer Federation of America, question if insurers aren't unfairly making up lost ground at their customers' expense.

"It shouldn't be a tough year unless the insurance companies want to take advantage of 9-1-1," he said.

If terrorism coverage is excluded from property insurance policies, average premiums should not go up more than 20 percent, Hunter estimates. Anything more, he says, is gouging.

Another problem for businesses: lack of competition. Five years ago, Suncoast had 10 companies bidding for its health care business; this year, it had three.

Ditto for Global Imaging Systems in Tampa. The Tampa office equipment reseller will pay about $12-million in 2002, up from $9-million this year, for its health insurance. The plan wasn't changed much, but it does include a new mail-order prescription service and wellness benefit.

Geoff Harrington, Global's director of benefits and training, said he is concerned about a similar rate hike or worse when he renews property insurance in April. So far, the company's carrier, Travelers, refuses to predict what the policy may cost next year.

"I've heard the horror stories of 50 to 100 percent increase in some areas and was getting a little bit shell-shocked," Harrington said. "How do you manage those kinds of costs?"

In the past, the company ate the increased costs. But not this time.

"The problem is I'm having to ask my employees for the same kind of increase the company is seeing," he said.

-- Times staff writer Kris Hundley contributed to this report. Jeff Harrington can be reached at harrington@sptimes.com or (813) 226-3407.

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