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.

LAGUNA BEACH —  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.”