Earthquake Insurance Plan

Re “Quake Insurance Plan Needs a Good Shake-Up,” editorial, July 15: The Times is wrong in suggesting the proposed California Earthquake Authority (CEA) needs a good shake-up. On the contrary, the CEA strikes a reasonable balance between providing earthquake coverage to consumers and limiting the virtually unlimited exposure of insurance companies.

The editorial suggests that the CEA could lack the money to pay claims and that policyholders might have to pay a 20% surcharge on their premiums indefinitely. What the editorial fails to recognize is that based on 50-year projections, the policyholder assessment would never be touched.

If the CEA had been in place in 1945, even with all the intervening disasters that California has experienced, the assessment would not have been touched. There is less than a 2% annual probability that policyholders will ever be assessed.

Yes, the best solution would be for Congress to enact a national disaster insurance program, but that doesn’t appear likely in the near future. Even if it is eventually adopted, it certainly won’t be a solution for the 200,000 policyholders of 20th Century Insurance who will be non-renewed in the coming months.

LYNNEA OLSEN, Vice Pres.

Assn. of California Insurance Cos.

Sacramento

* If the Legislature isn’t convinced that Californians need help with earthquake insurance, consider this: One insurance company I called won’t insure houses built before 1978 or two-story houses of any age. Another wouldn’t consider me because clients occasionally come to my house. That’s not for construction or buying merchandise; it’s just to sit down and discuss writing projects. And insurance companies that don’t offer regular insurance won’t even consider earthquake insurance.

STAN SEAVEY

Oxnard