Some Carriers Escape Huge Brush-Fire Losses : Insurance: 20th Century, TIG and others have been writing fewer policies for homes in fire-prone zones.

From his seventh-floor office in Woodland Hills last week, Ric Hill, a vice president at 20th Century Industries, could see smoke from the Calabasas/Malibu fire mushrooming into the sky. The fire was only a few miles away, but it was the wind that was on his mind.

20th Century insures 208,000 homes in California, including many in Calabasas and the western San Fernando Valley. “There was quite a lot of concern up here,” Hill said. “It looked to us like the fire was traveling northeast” toward Calabasas and the Valley.

As it turned out, the wind blew southwest and swept into the Malibu canyons, where 20th Century has few policies because it does not insure properties in brush-fire areas.

“We don’t write (insurance) in brush areas at all,” Hill said. “The firefighters can’t get to homes there, so they have to let them burn.”

So far, 20th Century has just 30 fire claims, estimated at several million dollars, almost all of them from the Altadena and Laguna Beach fires two weeks ago. As for the insurer’s toll from the Calabasas/Malibu fire: one claim for less than $10,000.

Luck and foresight cut 20th Century’s losses in the latest catastrophe, and those same things helped keep fire claims modest for several other insurers operating in the area.

TIG insurance in Woodland Hills, formerly known as Transamerica Insurance Group, a year ago started cutting back on insuring homes in brush-fire areas. To date, the property-casualty insurer has received $4.8 million in claims from the recent fires in Southern California, although that doesn’t include the Calabasas/Malibu fire.

The company changed its strategy after suffering $121 million in claims from the 1991 Oakland Hills fire, deciding to stop writing new policies for homes in brush-fire areas anywhere in California. TIG won’t say how many policies in the Santa Monica Mountains it has dropped, but the struggling company specializes in upscale homes, so it’s likely that the decision saved it millions of dollars in claims.

“In light of what just happened, it was the correct decision,” said Cheryl Friedling, a spokeswoman for TIG, which is owned by New York-based TIG Holdings Inc.

20th Century, founded in 1956 by its current chairman, Louis Foster, is best known for auto insurance, and it tries to keep its premiums down by insuring only drivers with good records. When 20th Century added home insurance in 1982, the company followed a similarly conservative approach.

However, TIG and 20th Century, as well as the rest of the nearly 280 insurers that operate in the state, face additional fees from the California Fair Plan, an industry-sponsored insurance pool of last resort in brush-fire areas. The Fair Plan faces claims of well over $100 million from the fires of the last two weeks and will call upon its insurance company members to replenish its depleted reserves. “Very, very few (companies) write policies in brush areas, and it’s getting less with every fire,” said Dennis Halio, owner of Elden Insurance Services Inc., an independent insurance broker in Calabasas. “Some companies I represent even want to be a mile or two away from a brush-fire area.”

For TIG and 20th Century, their modest losses will be further reduced by reinsurance, which insurers buy from Lloyd’s of London and other firms. In the Oakland fire, reinsurance cut TIG’s losses from $121 million to $21 million.

Zenith National Insurance Corp., a Woodland Hills property-casualty and workers’ compensation insurer, said it was fortunate to escape with fewer than 10 fire claims so far, said Fredricka Taubitz, chief financial officer.

“We’ve been very lucky,” she said. Last year, Zenith was hit with claims from Hurricane Andrew that resulted in $9.5 million in losses. In California, Zenith National insures mainly farmlands and homes in rural areas.

Another insurer who watched the smoke from his office last week in Woodland Hills was Erwin Cheldin, chairman of Unico American. Cheldin said it reminded him of the 1992 riots, which brought a crushing $21 million in losses to his tiny property-casualty firm, which insures mostly small businesses.

But this time, Unico American escaped with just two claims from Topanga Canyon businesses that suffered smoke damage. Unico American insures no more than 100 homes in Southern California, and none of them in brush-fire areas. “We’ve been hanging on with our fingernails” after the riots, Cheldin said. “Luckily, we missed this one.”