With Florida Keys property owners facing rising windstorm insurance premiums and more policy exclusions, local government and business leaders are examining alternatives to Citizens Property Insurance Corp., the state's insurer of last resort.

The first step down that path is an in-depth analysis of risk, cost, weather, building code and other factors. But that analysis would cost at least $350,000, said Monroe County Commissioner Heather Carruthers, who serves on the board of Fair Insurance Rates in Monroe (FIRM), a grass-roots nonprofit insurance watchdog group.

The Keys have been courted by at least one international insurance carrier. In January, a lobbyist and representative of Willis, a London-based company, sought out County Mayor David Rice, Carruthers and County Administrator Roman Gastesi to discuss the possibility of providing windstorm coverage in the Keys.

But a significant and still-unanswered question is who would pay for the initial risk study. FIRM Executive Director Annalise Mannix would like to see the money raised through private donations from Keys property owners, though she is doubtful that will happen.

Carruthers and members of FIRM expect to travel to Tampa in late July to meet with Citizens executives. At the meeting, they plan to ask Citizens to cover the cost of the study, Carruthers said.

Asking an insurance company to pay for anything -- especially something it doesn't have to -- seems highly unlikely, but Carruthers argued that it is not as crazy as it seems. Citizens wants to "depopulate" its coverage base in Florida, and it pays premium costs to other companies to take over insurance policies already, she said, adding that the company made nearly $500 million off the Keys alone during a 10-year period. Compared to that, $350,000 is a small amount, Carruthers said.

Carruthers said she also has had conversations with state Insurance Commissioner Kevin McCarty about having the Office of Insurance Regulation pay some of the cost, and McCarty seemed amenable to "kicking in" some money, Carruthers said. However, nothing has been promised so far, she said.

The analysis would be done by an independent company to help determine the real cost of insuring Keys properties, a cost that has been the subject of debate. A computer model for estimating damage would have to be developed, and every building in the Keys would have to be inspected, Mannix said. Citizens would have to release its documents and records, which Mannix said was "probably the most difficult part." She estimated the analysis would take about a year.

Citizens is removing some 678,000 policyholders from its rolls, and is now looking at excluding coverage of vacation rentals. The rule is not contained in Citizens documentation, but Joe Roth, head of the Regan Insurance Agency in Tavernier and Marathon, has said Citizens representatives are telling agents that they won't write policies on homes licensed to be rented out on a weekly basis.

"This is just wrong for this county," Carruthers said. "They are supposed to be the insurer of last resort."

Transient rentals are not the only exclusion in coverage. Citizens is no longer issuing policies on properties in coastal regions with replacement values of more than $1 million.

tohara@keysnews.com