Day-Care Centers to Stage Insurance Protest Strike

A year ago Linda Darby paid $70 to insure her tiny day-care operation. This year her insurance rates skyrocketed to $505 to cover the six children she cares for in her Escondido home, a problem that is driving small day-care operators out of business, she said.

As a result, Darby and other members of the San Diego County Family Day-Care Assn. will stage a strike Thursday to protest exorbitant insurance rates that they say are artificially high because of the recent notoriety of child abuse cases. Darby said she expects at least half of the group’s 750 members to shut their doors and picket in front of the state Department of Insurance on Front Street in San Diego.

“It’s not our intention to go out there and look radical or violent,” Darby said. “We are aware of our image. We take care of children for a living.”

Darby is insured through BMF, a Los Angeles-based insurance agency that is one of only two agencies in the state connected to the two companies which are still writing insurance for in-home day-care operators. In recent months, all other insurance companies have notified day-care operators that their policies will be cancelled as of Sept. 2, leaving the remaining two companies, Universal Securities and Scottsdale Insurance Co., free to raise their rates.

Georgia Yocum, owner of Loma Rica Insurance in Grass Valley, the other agency that writes day-care policies, said, “I’m very bitter against the companies. They use the emotional issue to stay away from the risk.”

Yocum said attention caused by child abuse cases, such as the McMartin preschool case in Manhattan Beach, has caused Universal and Scottsdale to raise their rates to unrealistic levels. For instance, Yocum said, Scottsdale doubled its rates in June, bringing the cost to $759 a year to cover nine children. And, Darby said, Universal raised her rates by 700%.

“It’s a high-profile risk,” Yocum said. “When something goes wrong it gets a lot of notoriety. The actual dollar amount involvement is very low.”

Darby and other members of the Family Day-Care Assn., each of whose members care for 12 or fewer children, plan to meet with the state insurance commissioner in Los Angeles on Thursday to lobby for a state-mandated payment plan for day-care operators, allowing them to pay their premiums in installments.

The state requires operators to carry $300,000 in insurance and Darby said people who can no longer afford insurance are being forced to operate without a license. “We’re watching a lot of clean, well-run operators go underground because they can’t operate legally,” she said.

Day-care operators also have had problems keeping their homeowner’s insurance, as well. Some insurance companies, such as State Farm, refuse to write homeowner’s policies for people who operate day-care centers in their homes. Assemblyman Steve Peace, D-Chula Vista, has introduced a bill in the state Legislature that would make it illegal for insurance companies to cancel or refuse to renew a homeowner’s insurance because a person is a licensed family day-care provider.

In addition, legislation that would create a temporary underwriting association composed of all liability insurers in California passed the state Senate Monday. The association would provide insurance policies for day-care centers but the liability would be shared by all member firms. But the bill’s author, Sen. John Seymour, R-Anaheim, said he would give it up if insurance companies agreed to comply voluntarily. Seymour said 18 or 19 companies have agreed to a voluntary program.