GULF SHORES, Ala. (AP) -- When Stan Virden moved into his 2,400-square-foot house overlooking a rock-lined canal in 1996, he paid less than $1,000 a year for homeowners insurance.
Now, as he seeks to move to Atlanta to be near family, Virden says potential buyers for the house are being scared off by the annual premium, which has skyrocketed to $5,000.
"We feel like we're prisoners here now because the market is so screwed up because of this," the 80-year-old retired Navy captain said.
From Cape Cod to the southern tip of Texas, rates for homeowner coverage have risen sharply since 2003, pinching homeowners financially, forcing them to take greater risk by accepting higher deductibles and sparking outrage as insurance companies report profits higher in many coastal states than inland.
Nationwide, the cost of homeowners insurance rose 36 percent from 2003 to 2010 -- almost double the rate of inflation. Of the 15 states where rates increased by the largest percentages in that time, 14 border the Gulf of Mexico or the Atlantic Ocean, according to an analysis of National Association of Insurance Commissioners figures by The Associated Press. All those states saw rates go up at least 44 percent. Rates in Florida rose 91 percent, most in the nation, while rates in Rhode Island went up 62 percent.
Insurers say the increases are necessary to offset the risk they take in insuring millions of homeowners in harm's way, but their increasingly angry customers question how they calculate rates and whether state officials in charge of balancing public and corporate interest are being too favorable toward the companies.
"It's hard to see how the insurance companies can justify the kind of premiums we have to pay down here," Virden said.
Rate increases have leveled off in recent years, and some homeowners have even found cheaper policies. But it's clear prices aren't going back to where they were before the spike following the expensive hurricane seasons of 2004 and 2005.
Overall, coastal homeowners in 18 states along the Gulf and Atlantic pay about $4 billion more than inland residents for insurance against hurricane winds, according to AP calculations using comparisons of coastal and inland rates in states where they're available.
The Atlantic hurricane season officially starts Saturday and runs through Nov. 30. Forecasters project 13 to 20 named storms.
Worsening the situation: premiums for the federally run National Flood Insurance Program -- whose policies many coastal homeowners also must buy -- are scheduled to shoot up Oct. 1. A homeowners policy typically covers wind, but not flood damage.
With the U.S. housing market in a slow revival, it may be too early to say what the skyrocketing insurance rates could do. Some real estate agents in coastal areas say there are warning signs.
Starke Irvine, an agent in Daphne, Ala., said the cost of insurance is driving down the market value of homes there. Homebuyers have only so much to pay toward a mortgage, insurance and taxes.
Some critics also say insurers are inflating the insured value of houses, saying they would cost more to rebuild, thus raising the total bill each year without raising rates.
"We've had insurers applying a 10 percent to 12 percent inflation factor every year to dwelling value," said Willo Kelly, who lobbies for real estate agents and homebuilders on North Carolina's Outer Banks. "Every increase that company applies to dwelling value is an increase in the premium, an increase in the deductible and an increase in the agent's commission."
A study by consulting group Towers Watson showed the cost of the goods and services insurers typically buy to pay a homeowners claim has actually declined from 2009 to 2012. That reflects falling building costs, said Towers Watson risk consultant Jeremy Pecora.
It's still unclear how the $19 billion in privately insured damages caused by Superstorm Sandy in October 2012 will hit policyholders. In the Northeast, insurers started seeking higher rates after Tropical Storm Irene in 2011 and continue to seek increases of up to 10 percent.
Industry advocates say the increases were inevitable. "Insurance rates in hurricane areas were too low for too long," said libertarian-leaning Eli Lehrer of the Washington, D.C.-based R Street Institute.
Robert Hartwig, president of the industry-backed Insurance Information Institute in New York, said insurers may have sold policies cheaply to attract customers to more profitable auto and life insurance, and regulators may have been unfairly holding prices down in some states.
And, he said, claims from severe weather have gone up. The Insurance Research Council found hurricanes and other weather catastrophes caused 39 percent of nationwide homeowners insurance claims payments from 2004-2011, compared with 25 percent from 1997-2003.