SOUTHLAND

Quake Insurance Hearing:

State Insurance Commissioner John Garamendi has called Farmers Insurance Group on the carpet for its decision to raise deductibles on its earthquake insurance policies to 25% from 10%, effective Sept. 1. He has scheduled a hearing to discuss the matter Tuesday. Garamendi contends that the action violates the state insurance code, but Farmers says it is within its rights. The change would mean that a customer with a $160,000 policy would have to absorb the first $40,000 of loss. Farmers, California’s third-largest residential insurer, is one of numerous companies that have temporarily suspended sales of new homeowners and earthquake coverage, citing vulnerability to another quake. Farmers incurred an estimated $1.1 billion in claims costs from the Jan. 17 Northridge earthquake. The hearing begins at 10 a.m. at the Insurance Department’s offices at 45 Fremont St., San Francisco.