There's a grassroots movement afoot to deal with rapidly increasing homeowners insurance rates. It started in the Gulf Coast states with senior citizen and middle-class homeowners who are being forced out of their lifelong residences by rapidly rising home insurance premiums.

And it could wind its way up the East Coast, following the path of hurricanes, and then gain traction in the Midwest as tornados continue to ravage the heartland.

So what is it all about? It's a movement for "clarity": Property insurers such as Allstate and State Farm would have to explain how and why they charge what they do -- and clarify it by ZIP code.

Why is this important? Like many homeowners I believe I pay too much for insurance on my small home near the Jersey shore. My premium went up 25 percent after Superstorm Sandy, even though I didn't file a claim. Our area sustained flood damage, but a home insurance policy generally doesn't cover that. Instead, it's covered under the federal flood insurance program.

Another Southern rebellion

Almost everyone is struggling to adapt to the extreme climate change of hurricanes, tornadoes and baseball-sized hail that we're seeing as lead news and weather stories. So, not surprisingly, are insurance companies -- by raising rates.

But is it fair? Or an effort to pad the bottom line?

Groups like the Homeowners Hurricane Insurance Initiative (HHII) in Alabama, Fair Insurance Rates in Monroe (FIRM) in Florida, and the Florida Association for Insurance Reform (FAIR) -- the areas hardest hit by storms like 2005's Hurricane Katrina -- are questioning how insurance companies determine what we pay.

"This is a grassroots movement by senior citizens who've been in their homes a long time and want to stay there," says Executive Director Amy Bach of United Policyholders, a nationwide nonprofit consumer group. "Its members are mostly low- and middle-income."

Disclosing data

And these groups have been victorious with the support of United Policyholders.

Alabama now has a "Clarity Act" that requires insurers to disclose -- by ZIP code -- how much they collect in premiums and how much they pay in claims for each ZIP code within the state. A Mississippi house panel passed a bill this year that ultimately died in the full legislature due to opposition by that state's insurance lobbyists. But its backers say they'll try to pass it again next year.

"This could spark more debate on how much homeowners are charged to cover against hurricanes, as well as make it clearer what areas private wind insurers are avoiding," says the Associated Press.

United Policyholders helped get a similar measure started in Louisiana. "We encouraged Louisiana to join the growing number of consumer-friendly states in bringing 'clarity' to insurance ratemaking," says Bach in a letter to the Louisiana legislature.

There's no doubt that insurers raised rates on coastal homeowners across the country, sometimes as much as two to three times more than for areas farther inland. Insurers argue that these rate hikes are necessary because coastal properties face higher storm risks than those in the interior.

But the losses reported by Alabama's insurers, going back 10 years, show that losses in coastal counties are actually $100 lower per policy than in the rest of the state, according to the HHII, even though those years include Hurricanes Ivan and Katrina, which both made direct hits on the state in 2004 and 2005, respectively.

The enemy: 'cat modelers'

So why are rates higher in certain areas? The answer: catastrophe "modelers."

Most home insurance companies rely on international firms called "cat modelers" that try to predict where the next catastrophe, such as a hurricane, will happen, based on their proprietary scientific data and past experience. So it's rather easy to say that coastal areas will be hard hit, and therefore should pay more.

When insurance companies want state regulators to grant rate increases, insurers "bring in an army of lawyers, experts and a battery of statistics from catastrophe modelers," says Bach.

But these models are inherently suspect because the insurance company pays the cat modeler, and therefore obtains the outcome it wants, she points out.

"It takes a lot for an insurance commissioner, with an understaffed department lacking in authority, to stare down a rate filing by an insurer and disapprove it," Bach says.

'Memories are short'

That's why Bach and other consumer advocates are in favor of these Clarity Acts. It puts real information -- not just hypothetical theories -- in the hands of policyholders.

"It is an important precedent to collect insurance data by ZIP code," says Robert Hunter, the director of insurance for the Consumer Federation of America. "It's needed to test the insurance industry's assumptions -- since they never produce the data themselves unless required to do so."

He says, however, that looking at claims versus premiums by ZIP code isn't valid unless you examine the results over many years. And insurers agree.

"Memories are short," warns President Robert Hartwig of the Insurance Information Institute, which represents the industry. "The Gulf Coast is in a quiet period and people there are claiming they pay too much. But I can tell you for a fact that there will be tens of millions of dollars in losses there in future years."

Hartwig may be right. But it helps everyone, especially homeowners like me who feel we've been overcharged, to know exactly how much we pay for what we get. I'd like to see a Clarity Law in my home state of New Jersey.

And I may get one. Bach sees the movement heading up the East Coast toward Massachusetts.

"Sunshine is the best medicine," says the United Policyholders executive. "Clarity laws have the potential to bring down insurance rates and stimulate competition."