Groups Seek Action on Quake Coverage : Insurance: Coalition asks Quackenbush to freeze rates and to abandon 'de-linkage' stance.

TIMES STAFF WRITER

A coalition of consumer groups called on new Insurance Commissioner Charles Quackenbush Thursday to freeze rates on earthquake coverage, to reverse his stand on "de-linking" homeowners and earthquake insurance and to intervene on policyholders' behalf in disputes over claims from the Northridge quake.

In a letter sent to Quackenbush and simultaneously released to the media, the five organizations noted that he faces more than 70 applications from insurers for earthquake rate hikes, many seeking increases of 100% or more.

The groups asked Quackenbush to delay hikes until he develops "a consistent scientific or actuarial basis for the assessment of the risk" underlying the new rates.

Greg Butler, deputy insurance commissioner for policy, said Quackenbush will resist any "cookie-cutter" approach that forces all insurers to operate the same way. He added that the Northridge temblor proved that there is no accurate way to predict quake damage.

"To say we should hold off all rate increases till we get a perfect model is naive," Butler said.

The consumer advocates said that de-linkage--repealing the law that requires homeowner insurers to also offer earthquake coverage--would make it impossible for many consumers to purchase quake insurance.

Quackenbush supports de-linkage only if insurers continue covering existing policyholders and if the industry provides acceptable alternative policies for new customers, Butler said.

Quackenbush has already helped settle some disputes between insurers and policyholders and will soon announce a mediation program to resolve others, Butler said.

The consumer groups that sent the letter are the Center for Public Interest Law, Community Assisting Recovery Efforts, Consumer Action, Proposition 103 Enforcement Project and United Policyholders.

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