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|Saturday, January 22, 1994
EARTHQUAKE: THE LONG ROAD BACK; State Farm Ban on
New Quake Policies Prompts Rebuke by Garamendi;
By: THOMAS S. MULLIGAN
Asked why the ban extends up to 250 miles and affects cities as distant as Modesto, Cooley said State Farm intended it to include not just areas directly affected by Monday's Northridge quake but also those places with "significant seismicity."
The moratorium, imposed Wednesday, covers 18 counties, including much of the California-Nevada border and the Central Valley, as well as Southern California. However, it does not include San Diego County, parts of which have felt tremors from this week's quake and aftershocks.
"I will not permit the insurer of one in four California homeowners to impose a blanket and open-ended moratorium in areas wholly unaffected by the Los Angeles earthquake," Garamendi said in a statement.
"There shall be no moratoriums in those specific areas where earthquake aftershocks are not occurring," he said.
Part of Garamendi's objection is that State Farm did not specify the duration of the moratorium, saying only that "past moratoriums have generally lasted 30 days."
Cooley said State Farm does not expect the ban to last even 30 days.
Allstate, the second-largest carrier with 16% of the California market, has imposed a moratorium on the area within a 100-mile radius of Northridge.
Dick Donegan, regional underwriting manager, said Allstate was ready to lift its moratorium Friday, but strong aftershocks and reports of new damage prompted it to keep the ban in force.
Farmers Insurance Group, No. 3 in California, has a moratorium that covers "the affected area," spokesman Jeffrey Beyer said.
Like State Farm, neither Allstate nor Farmers set
specific terms for the moratoriums.
Copyright (c) 1994 Times Mirror Company
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