298: Transamerica Insurance bows out of fire-prone East Bay regions in 1992

298.

Published news story by Lurene Kathleen Helzer, October 1992, East Bay Journal, “Transamerica bows out”. There is no date on clipping, but I’m reasonably certain it was 1992 because of wording inside the story. The small item’s about a major insurer announcing it will refuse fire coverage in future for some areas of Oakland and Berkeley. Other areas of the immediate region were affected, too, as were some in Southern California. These were areas with expensive real estate, too.

At the time, Transamerica was the first major insurance company to announce such a commercial decision for the East Bay Hills. At the time I wrote it in 1992, it seemed at first glance that Transamerica was being unfair in its decision to abandon these areas. Many wondered, “Don’t people with expensive homes in the East Bay hills deserve fire insurance with Transamerica? The homeowners have the money, so what’s the problem?”

The problem for Oakland and Berkeley was risk. These expensive neighborhoods were full of non-native, flammable, blue-gum eucalyptus, Monterey pine, and acacia trees. The neighborhoods also had narrow roads. The fire trucks could hardly get in when flames were moderate. By the time whole blocks were burning in 1991, there wasn’t much the experts could do even if they had the rescue equipment right there. California was expected to enter its seventh year of drought in 1993, too. Berkeley’s Fire Chief Gary Cates discussed this clearly after the massive 1991 fire, and was sensitive about the entire issue. We had to carefully check our 1991-92 reporting for any insinuation toward rescue personnel of professional disregard. The journalist had to be careful.

What makes it worse is that various interests/property owners in area agree on little insofar as fire prevention goes. One group fights for the removal of dangerous trees, and the next group glorifies the random environmentalist who sits on the Berkeley tree for several months. The local media innocently, meekly mentions the first group, but loves the second.

So, to be truly fair in January of 2009, Transamerica was probably acting with some degree of prudence in 1992; there is no haven for even the mightiest insurers. Since 1992, Transamerica was swallowed by the Dutch Aegon NV. By October of 2008, that European company was forced to accept large cash injections – some 3 billion Euros -- from the Dutch government. Their stock at the moment, like many other companies of early 2009, is practically being used as kitty-box liner in Amsterdam.