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Tuesday, December 7, 1993
Home Edition
Section: PART A
Page: A-3

Putting a Premium on Trust; Insurance: In the struggle to rebuild after the recent fires, many homeowners must rely on the word of insurers. Some have become wary after riding a roller coaster of emotions.

By: REBECCA TROUNSON
TIMES STAFF WRITER



Loretta Edger does not think of herself as distrustful. She says
she was never the kind to make notes of conversations, or ask anyone to
confirm an agreement in writing, or record phone calls.

She is now, though--at least when it comes to her home insurance.

Since Oct. 27, when the Laguna Beach brush fire consumed her two-story
stucco house on picturesque Buena Vista Way, Edger's emotions have
soared, crashed, lifted and then plummeted again, based each time on
conversations with the Farmers Insurance Group.

Even now, despite a hard-won promise from Farmers that she can rebuild
her house, she remains wary, afraid that all is not as it seems.
"Why should I trust them now?" asked Edger, 53, a widow and former
teacher who lives in Illinois and rents out her Laguna house. "One day
I'm up, one day I'm down. One day I'm rebuilding, one day I'm not. I
don't know whether to believe them anymore or not."
In the weeks since the fire, the issue of insurance coverage has
assumed paramount importance for the owners of more than 1,100 homes and
other structures that were destroyed or damaged in two weeks of Southern
California fires. Edger's experience, while hardly typical, illustrates
the struggles that come with attempting to rebuild life from the ground
up.
She and the other eight individuals and families whose homes were lost
at the northern end of Buena Vista Way are spending long hours compiling
comprehensive, minutely detailed lists of every picture, book, article of
clothing or piece of furniture they can remember in the homes they lost.
From friends, they are trying to collect photographs of their houses
and valuables. And they are working with architects to re-create drawings
that were incinerated with the buildings, but are crucial to the
insurance process.
Edger, a friendly, straightforward woman with a Midwestern accent and
short, graying hair, said she felt better last week when she saw her
property looking a little less devastated.
She watched and took pictures as the workers cleared the lot, removing
the last vestiges of the home she had shared with her husband 14 years
ago. In 1980, a few months after her husband was killed here in an
industrial accident, she and her children moved to Illinois.
With the house--and a major part of her financial security--now gone,
Edger said nothing short of a written guarantee from Farmers saying she
can afford to rebuild will ease her lingering concerns about the future.
Farmers spokesman John Millen said he was reluctant to discuss the
specifics of Edger's claim, but acknowledged that the company made some
mistakes in her case. Millen said the company has now agreed to
retroactively upgrade Edger's coverage, essentially ensuring that she can
rebuild her home.
By late last week, just before Edger flew home to Illinois after
spending nearly a month in Laguna Beach, Farmers officials had provided
her with some details of her new coverage. The policy will substantially
increase the amount the company will pay toward rebuilding her home, and
add to the amount she will receive in lost rent and landscape
replacement.
Other burned-out residents of Buena Vista Way have avoided similar
difficulties in dealing with insurers in the days since the fire.
Thomas Homan, a businessman who carried top-of-the-line coverage on
his modern, stucco house, said last week he was well satisfied with the
Allstate Insurance Cos.' response. So was George Cary, whose multilevel
dwelling also was covered by a deluxe Allstate policy.
Homan even pronounced his insurance carrier "fantastic" in the way it
has treated him. "I can't even think of one bad thing to say about them,"
Cary said.
Edger said her difficulties with her insurers began before the ashes
of her 2,600-square-foot house were even cold.
On Oct. 28, the day after the fire, she tried to reach her insurance
agent by phone from Illinois. Hoping for advice about what documents to
bring when she flew out to view the damage, she waited for his call,
pushing her departure back several times, she said. The agent called back
four days later, on Monday night.
To make matters worse, when she arrived in Laguna Beach, she said she
was given conflicting information by her adjuster, Bill Ellis, and other
Farmers representatives about what her "standard form" fire insurance
policy would cover.
At one point, assured by a regional adjuster that she would be able to
rebuild, Edger bought decorating magazines and spent the evening dreaming
about her new house. The next day, she said, she was told her coverage
would not be enough after all.
Millen said he could not discuss the details of Edger's complaints
about her treatment. "But when honest mistakes are made, we're going to
work closely with our customers to resolve those. We're all people and
people make mistakes," he said.
Edger asked the California Department of Insurance to investigate. In
her complaint, she also told state officials that she had been stunned to
learn of the new law that requires insurers to inform new homeowners or
those renewing policies about the availability of better coverage. She
had renewed her policy by mail in August, one month after the law took
effect.
California Department of Insurance spokesman Bill Schulz said Edger's
complaint came relatively early in the insurance process, but that she
appeared to have reached a dead end in her dealings with Farmers. At the
least, she was not getting "the basic kind of assistance one ought to
expect at this juncture," Schulz said.
Aware of the investigation, Farmers did not wait for a decision from
the state before opting to give her extra coverage, retroactive to the
time of the fire.
But the spokesman said Edger's new coverage may not cover all costs to
meet building codes enacted since it was constructed in the 1940s. That
coverage is not normally part of the "landlord protector plus" policy
Edger will now have, but he called the distinction minor.
The company's decision to increase Edger's coverage well beyond the
$206,000 limit in her original policy was based on the special
circumstances involved in her claim, he said.
When Edger and her children moved out of Laguna Beach in 1980, she
changed her homeowners policy for the Buena Vista house to reflect the
fact that it had become a rental property.
Six years later, the agent who sold her the insurance policy retired.
He passed his clients on to agent Dennis DePrete. But because Edger never
made a claim, she had little contact with DePrete and never met him. Each
year, she renewed the policy by mail.
DePrete referred questions about Edger's situation to regional claims
manager Thomas Scheetz, and ultimately to Millen.
"She bought this policy from one agent, then she moved away and in the
meantime her policy was transferred to another agent," Millen said. "If
you don't have the opportunity to meet with someone, things can get
garbled from time to time. But we're going to take care of her. Given
these very unusual circumstances, we try to lean in the customer's
favor."
But Farmers officials also told Edger they could put nothing in
writing for some time.
Still concerned, Edger was trying hard to feel reassured.
"I think I'm just going to have to try to trust them," she said
finally. "I'd like to see it in writing, but I do think now they have
every intention of doing what they have to do, if only to keep me quiet."


---- START OF CORRECTION ----
For the Record
Los Angeles Times Thursday December 23, 1993
Home Edition Part A Page 3 Column 5 Metro Desk
2 inches; 52 words
Type of Material: Correction 
Fire insurance--A Dec. 7 story on fire insurance concerns in Laguna
Beach incorrectly implied that Farmers Insurance Group violated a new
state law that requires insurers to inform new and renewing policyholders
about the availability of better coverage. Although the disclosure law
took effect July 1 for new policies, it does not apply to renewals until
after Jan. 1.
---- END CORRECTION TEXT ----

PHOTO: Near the remains of the house she owned, Loretta Edger
explores design options for her new home with architect Tom Burger.
PHOTO: Edger's emotions have soared, crashed, lifted and then
plummeted again during her dealings with insurers. "I think I'm just
going to have to try to trust them."
PHOTOGRAPHER: GAIL FISHER / Los Angeles Times


Descriptors: LAGUNA BEACH (CA); BRUSH FIRES -- ORANGE COUNTY; PROPERTY DAMAGE; INSURANCE CLAIMS; DISASTER VICTIMS

Copyright (c) 1993 Times Mirror Company

 

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