FORT LAUDERDALE, Fla. — Some homeowners have had to beef up the amount of property insurance they buy to cover what they say are inflated cost estimates to rebuild their homes.

It's a double whammy for homeowners because for many, rebuilding costs didn't go down when the economic downturn lowered construction costs over the past few years.

Take John Hutelin, a pilot in Plantation, Fla., whose premium increased 24 percent, to $3,873, after Citizens Property Insurance recalculated the cost to rebuild his home.

"That's how they're increasing premiums," Hutelin said. Rebuilding costs are one of two ways state-backed Citizens can get around a law capping its annual premium increases at 10 percent.

Citizens spokeswoman Christine Ashburn said the insurer wants customers to have enough coverage, which many didn't have after the hurricanes of 2004 and 2005.

Citizens, the largest home insurer in Florida, started changing its rebuilding costs in late 2010, moving to 360Value, an estimating software program sold by Insurance Services Office. Rebuilding costs determine how much coverage a homeowner has to buy for the main structure of the home, the largest part of a typical policy.

Mike Fulton, an assistant vice president of the ISO subsidiary that produces 360Value, said the scrutiny is welcome: "We are confident this review will ... show that 360Value is the most closely aligned with the actual insurance-repair market."

Americans for Insurance Reform, a national coalition of consumer advocacy and nonprofit groups, recently produced a report that criticized regulators for allowing insurers to base rates on data from ISO, alleging it's "industry-controlled" because it was formed by the industry before spinning off into a private company.

ISO describes itself as "an independent advisory organization."

The problem, Fulton said, is that home values are plummeting but rebuilding costs are not, and many people don't understand the difference. "This is at the heart of the issue and the concerns voiced in Florida," he said.

Calculation used

360Value estimates a home's rebuilding costs in part by using an index that captures changes in reconstruction costs based largely on actual repair estimates.

Homeowners who think their rebuilding costs are high can do what Hutelin in Plantation is doing: appeal to the state and be prepared to shop for insurance.

Hutelin paid $200 for an appraisal in June because he was shopping for insurance and found premiums varied depending on the insurer's estimate of rebuilding costs. Citizens sold him a policy in August based on the appraisal.

Four months later, the insurer estimated his home would cost $354,400 to rebuild — or 23 percent more — and backdated an increase in his premium to August.

"Imagine getting a bill from the grocery store four months after the fact because produce cost more than they expected," he wrote in an email.