Officials confirm dropped policies

Resident Ganka Brown startled the City Council on Aug. 17 with a warning that insurance polices are being canceled, which she blamed on dead and overgrown vegetation, particularly eucalyptus trees.

Brown said she became aware of the cancellations because it happened to homeowners she knew.

"I know of two people who were told by their carriers they would no longer be insured, one of them specifically because of the eucalyptus trees bordering — not even on — his property," Brown said. "Eucalyptus don't serve any purpose in this town."

Brown said there are dead pine trees all over town, which also create a fire hazard.

"We are getting calls from a number of people every week," said John Campbell, an insurance broker in Laguna since 1973. "And it's not just one company. It's all over the board."

City Manager Ken Frank confirmed the cancellations.

"It's mainly Farmers [Insurance Group]," said John Moriko, owner of the only Allstate agency in Laguna. "We also re-underwrite, but we make recommendations to our clients and if they follow the recommendations or conform to the [California fire code], we do not cancel. Farmers sends you a letter saying you live in a forest — not even brush — and there is no appeal."

Insurance companies go through a process called re-underwriting. Properties that don't measure up to the company's risk guidelines could have their policies canceled.

In response to questions about the cancellations by Farmers, Jerry Davies, assistant vice president of media and public relations, North America, e-mailed a statement saying statewide eligibility guidelines were changed in 2009 for a small percentage of homes in areas with elevated wildfire risk, including Laguna Beach.

Davies said Wednesday by telephone that he would be unable to give an accurate count of renewals and cancellations in Laguna for at least another month because the company is still working on some policies.

"It was ultimately the individual homeowner's decision about whether or not to comply with adjusted guidelines," according to Farmers' e-mailed statement."

"Some policyholders decided to meet the adjusted guidelines and the policies were renewed after a physical inspection was performed to confirm that the homes satisfied the standards. Farmers continues to provide insurance coverage throughout California and continues to accept new homeowners' business in Laguna Beach, even in areas with elevated wildfire risk, given that these properties satisfy the established underwriting eligibility criteria."

"The main thing is to make sure all eaves are covered," Davies said. "There are a number of certified eave covers on the market."

Farmers' revised guidelines also included removing tree limbs from roofs and vegetation from gutters and clearing brush for 100 feet from structures to property lines, Davies said.

However, many properties in Laguna do not extend 100 feet beyond the structures, Moriko said.

State Farm's name was also raised in Frank's brief response to Brown's comments, but only in one instance that he knows of, Frank said Tuesday.

Laguna Beach State Farm agent Jim Lawlor said that his carrier grandfathered all existing policies after the 1993 fire until a change of ownership, regardless of location.

"There were no random cancellations and we have maintained that," Lawler said.

At the time, the insured homes were required to have a clear area of 300 feet on all sides, but that has changed, Lawler said.

"If a house is on a through street with access at either end, only 100 feet has to be clear," Lawler said. "If the home is on a dead end or a cul-de-sac, it must be clear for 1,000 feet on all sides."