In Mierzwa vs. Florida Windstorm Underwriting Association, the court ordered insurers to pay the full value of the homes destroyed by the hurricanes. Insurers argue they should pay for only that portion of the damage caused by wind.

"The court took a 100-year-old law that used to apply to fire to say that wind insurers can be held liable for flood damage if a home is totally destroyed," Mr. Miller explained. "We have never paid flood losses before and never collected a premium for flood losses before."

The court's ruling "is an incredible jump that will require incredible rate increases," Mr. Miller added.

Currently about 1,000 claims are being denied because they are based on flood damage. Carriers hope they will get a favorable ruling in another appeals district, which would then force the issue to the Supreme Court.

But Mr. Miller said that process could take more than a year, and so the insurance industry is seeking legislative relief. The House Insurance Committee approved the measure, but it was removed at the Budget Committee?an action Mr. Miller attributed to the efficacy of the trial lawyer's lobby.

"If we can get the legislature to reverse Mierzwa retroactively, we may or may not continue with the other legal stuff," Mr. Miller said. But a retroactive legislative reversal may not withstand court scrutiny, Mr. Miller opined.

Competing hurricane legislative packages are moving through both the House and the Senate.

David Reddick, state affairs manager for the National Association of Mutual Insurance Companies, said the hurricane bills "differ on several provisions, which have caused local lobbyists to observe that any final version will not be worked out until the last week of the session."

The legislature is set to adjourn May 6.