Insured Losses in Southland Fires Hit $950 Million : Claims: Covered damage tops 1992 riots, making the fires the industry’s second-costliest, after the Oakland Hills blaze.

It’s official: The recent Southland wildfires caused an estimated $950 million in insurance losses--more than the 1992 Los Angeles riots--and overall rank as the second-costliest series of fires since the industry began keeping official records in 1949.

The estimate was released Wednesday by Property Claims Services of Rahway, N.J., the industry’s clearinghouse for disaster statistics. The figure compares to $775 million in insured damage from the riots. The Oakland firestorm of 1991 remains the costliest U.S. blaze on record, with claims of $1.7 billion.

State Insurance Commissioner John Garamendi warned insurers Wednesday not to use the fires to support requests for rate hikes.

Garamendi, in a telephone interview, also said he will order hearings on the California Fair Plan to consider--among other issues--whether its policyholders in brush-fire-prone areas are being unfairly subsidized by the rest of the Southland’s homeowners.

The Fair Plan is the industry-sponsored insurer of last resort for homeowners in canyons and brushland, where most carriers refuse to write fire insurance. Although it is tiny compared to such industry giants as State Farm and Allstate, the Fair Plan was socked with estimated claims of $120 million in the Calabasas/Malibu fire alone--far more than any other insurer.

The Fair Plan’s relatively low rates--premiums average $715 a year for an average of $318,000 worth of coverage in the brush-fire zones--have raised concerns that the vast majority of California homeowners are picking up the tab for the minority who live in high-risk areas.

Garamendi said he has set no date for hearings but will call them soon.

Overall, the Fair Plan’s estimated losses from the recent fires are $143.5 million.

Among individual insurers, State Farm was the hardest hit, with losses estimated at $135 million to $145 million. Next is Allstate, with $98 million; Farmers, $72 million; Chubb, $18 million, and Safeco, $15 million. Dozens of other carriers sustained significant losses, but none reported claims of more than $10 million.

As of Wednesday, 4,988 claims had been logged from the series of wildfires that struck hardest in the Laguna Beach area, with claims of $435 million. Insured damage in the Calabasas/Malibu blaze was put at $375 million. Losses from the remaining fires, in Altadena, Thousand Oaks, Anaheim Hills, Riverside County and elsewhere, totaled an additional $140 million, Property Claims Services reported.

Federal authorities have reported that 1,241 structures were destroyed in the slew of fires.

Industry officials and regulators have said the fires should have little effect on insurance rates, but, by coincidence, the state’s two largest carriers--State Farm and Allstate--have requests pending with the Insurance Department for increases in homeowners premiums of 8.3% and 9.9%, respectively.

State Farm has 24% of the state’s homeowners insurance market; Allstate’s share is 16%.

Representatives for the two companies said the fire losses played no part in their rate filings because the documents were prepared well before the first fires struck Oct. 27.

“We have had no rate change at all since 1986,” State Farm Vice President Roger B. Tompkins said Wednesday. He cited “inflationary pressures over the last seven years” as the reason for the request.

Allstate, which received its last hike in homeowners rates in early 1991, also cited inflation.

“I think any insurance company that wants a rate increase has an extraordinary burden of proof,” Garamendi said.

Harvey Rosenfield, author of the 1988 Proposition 103 insurance rollback initiative, said Wednesday that he hopes to fight the proposed rate increases.

Rosenfield said he just mailed 100,000 letters to potential supporters trying to raise money to mount the legal challenges. He said he also hopes to finance a move to overturn new state laws that he contends illegally undercut the effect of the rollback initiative.

One such law--called the “deemer” law--says that if the insurance commissioner fails to act on a rate increase request within a specified period, the request is automatically deemed approved. The rate increase requests by State Farm and Allstate were filed soon after Gov. Pete Wilson signed the new law.

Garamendi, who also opposes that law, has refused to grant most rate increase requests since he took office in 1991. He particularly opposes such applications from companies that, like State Farm, have refused to provide rebates ordered under Proposition 103.

10 Worst U.S. Catastrophes

Following is a list of the 10 worst U.S. catastrophes, in terms of insured losses, since the insurance industry began keeping official records in 1949. The totals are not inflation-adjusted. The industry counts the Laguna ($435 million) and Calabasas/Malibu ($375 million) fires as separate catastrophes and has not given the Altadena and other 1993 fires ($140 million total) catastrophe status. The listing below considers all those blazes in total.

1. Hurricane Andrew (1992): $15.5 billion

2. Hurricane Hugo (1989): 4.2 billion

3. East Coast spring storms (1993): 1.75 billion

4. Oakland/Berkeley firestorm (1991): 1.7 billion

5. Hurricane Iniki (1992): 1.6 billion

6. Loma Prieta earthquake (1989): 960 million

7. California wildfires (1993): 950 million

8. Alabama to Oregon freeze (1983): 880 million

9. Los Angeles riots (1992): 775 million

10. Wind, hail, tornadoes in Texas, Oklahoma (1992): 760 million

Source: Property Claims Services (American Insurance Services Group)

10 Worst U.S. Catastrophes