Insurance and Northridge Quake

In “The ‘Earthquake Crisis’ Is an Insurance Hoax” (Commentary, Aug. 29), Harvey Rosenfield mentioned 20th Century’s automobile rate filing. The impression left was that it was linked to the January 17, 1994, Northridge earthquake. It’s important to keep the facts straight:

* The requested 9.2% rate increase was filed in December, 1993--well before the Northridge quake.

* More than six years have passed since the last rate increase for our automobile customers. In fact, the last rate action was a decrease for 21st Century customers in 1989.

* We don’t recover money we have paid in claims--we price for future claims. Northridge was vastly more expensive than anticipated in the premiums--and almost $20 million in automobile earthquake claims isn’t even accounted for in the December filing.

Lastly, it’s ironic that Rosenfield so casually brushes aside the enormous effort and expense borne by 20th Century, the Department of Insurance, the Economic Empowerment Foundation and the Utility Consumers Action Network as each dissected and debated every detail of the filing--exactly as Rosenfield’s Proposition 103 required.

RICK DINON

Senior Vice President

20th Century Insurance Co.

Woodland Hills

* I wonder if Rosenfield knows just how crafty 20th Century Insurance Co. is being in recovering funds doled out to earthquake victims. A 20th Century auto insurance policy holder, I just learned that my 1990 Mazda Miata has been reclassified as a “high performance” vehicle, upping my premium by $300 a year, representing a 40% hike in my annual premium. My modest, little car is hardly a high performance vehicle on any standards, however, when I checked out the legality of this with the California Insurance Commission and via the insurance “hot line,” I was assured that it is perfectly OK for the company to do this and that they had received permission from the insurance commissioner.

Excuse me. Suddenly after four years since the Miata hit the market, it’s become a “high performance” vehicle. It sounds more like a excuse to recoup funds to me. However, after auto insurance shopping I found another company willing to insure my modest Miata as just that, and for a savings of half what 20th Century was charging. So maybe this was a financial blessing in disguise. I still don’t like it.

PATTI PIETSCHMANN

Los Angeles

* Haven’t the citizens of California suffered enough? We’ve had to endure earthquakes, fires, a riot and now Rosenfield wants us to believe that these devastating events are part of a diabolical plot by the insurance industry to get unjustified rate hikes!

These catastrophic events, along with significant losses caused by Hurricane Andrew in Florida and Hurricane Iniki in Hawaii, have made it clear that legislators, insurers and consumer advocates who have a legitimate and genuine interest in the public’s needs must work together to encourage the enactment of a federal law that would provide more Americans with access to affordable coverage against catastrophic losses.

MARY CRYTAL

Regional Manager

Western Insurance Information Service

Los Angeles