Nov. 19 2003 12:00 AM

Insurance commissioner works the crowd in fire's aftermath


    "How many of you are victims of the firestorm?"

    The man addressing the crowd of about 300 watched as virtually every hand shot up. Aging-Ken-doll handsome, with preternaturally dark hair combed in a ruler-straight side-part, and wearing an immaculate suit, state Insurance Commissioner John Garamendi flashed an engaging smile "OK. We're going to have some questions."

    The setting: a large, brightly lit conference room at a Scripps Ranch church. The evening's event: the third in a series of town hall meetings scheduled by the state Department of Insurance (DOI) for individuals affected by the Southern California wildfires.

    Many attendees, faces reflecting anxiety and frustration, loaded up on literature from information desks at the back of the hall and took copious notes on legal pads. More than two weeks after the flames had been contained, these people found themselves trudging waist-deep through the bureaucratic phase of their collective nightmare.

    Leading a panel that included representatives from the Federal Emergency Management Agency (FEMA), the state Office of Emergency Services, San Diego Fire-Rescue Department and the DOI's consumer affairs department, Garamendi said he had come to help guide survivors through what would surely be a long and difficult process.

    Among the many subjects to discuss: FEMA registration; spikes in rebuilding costs following major disasters; the potential for becoming a fraud victim at the hands of unlicensed contractors or phony adjusters; threats of erosion, winter flooding and mud flow; disaster unemployment assistance; Small Business Administration (SBA) loans; crisis counseling; and debris removal.

    Then there was the insurance piece of the puzzle-how to file a claim and maximize a settlement.

    Garamendi explained that the DOI had brought in catastrophe teams from all over the country to assist with the approximately 8,000-and rising-claims that insurers were already handling.

    A major topic was the emerging issue of underinsurance, which Garamendi called "one of the major challenges [the DOI] will be having.

    "In the previous firestorms, this issue of underinsurance came up," he continued. "When it was clear that the company either misled or did not properly underwrite, the contracts were what we say "˜reformed,' and the levels of coverage were increased."

    Garamendi seemed particularly bent on easing the crowd's tension level, which ranged from angry to almost tearful. A cell phone loudly sounded the appropriately chaotic tones of Flight of the Bumblebee. "That's OK," Garamendi reassured the phone's embarrassed owner.

    Much of the meeting was devoted to audience questions.

    With forecasts of insured losses reaching between $2.5 billion and $3.5 billion, would rates be raised statewide?

    "No," Garamendi replied, claiming no fondness for rate increases and evoking Prop. 103 as his backup. "In order for an insurance company to raise its rates, it has to come to the commissioner and seek permission to do so." Then, Garamendi cozied up to the audience a degree further, adding that Prop. 103 "also set up an elected commissioner, which I think is pretty cool."

    A woman who had lost her home asked if she should now get renter's insurance.

    "Well, you can roll the dice," Garamendi replied. "A lot of people did." He predicted that one of the most underinsured groups would be renters, particularly in the backcountry, and noted that the completely uninsured who had been totally wiped out would have to rely on FEMA, the SBA, the Red Cross and charity to recover.

    One man vented about receiving a declination letter from FEMA. When the panel's FEMA rep asked him if he had insurance, he lost a bit more of his cool and replied, "There probably isn't a Scripps resident here that doesn't have insurance."

    The rep explained why the man need not appeal the letter, causing Garamendi to interject, "It, uh, appears as though there's an inartful drafting of the information." The audience paused a beat, then burst into laughter.

    Even more unlikely mirth was generated by his response to a woman who wondered if Scripps Ranch would now be declared a brush zone and what would happen come policy renewal time.

    "There are many reasons why the companies may be non-renewing," Garamendi said. "But I don't think you're in a brush area-at least for a few years."

    On a more serious note, he informed her that the "use-it-and-lose-it thing is not going to happen-certainly not in this case."

    At one point, a diminutive, silver-haired woman spoke out about her own policy dilemmas. Holding up a fat manila envelope, she declined aid from a representative of her insurance company in attendance and insisted on personally giving Garamendi the packet.

    The meeting went overtime, with Garamendi interspersing his delivery of esoteric insurance details with deadpan humor-eliciting more laughter than would reasonably be expected for simply intoning the acronym RFA-for Request for Assistance form.

    And what, a man asked, could a person expect to receive back after sending said RFA paperwork off to the DOI?

    "Satisfaction," Garamendi answered.

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