A friend of mine recently asked me about the wildfires in California. Are they going to start raising everyones rates now? As it happened, I had just read a press release from the Insurance Information Institute (I.I.I.) on the subject.

I said no; that, according to the I.I.I., Policyholders whose homes or businesses were damaged or destroyed by the wildfiresshould not see increases in their premiums nor have their policies cancelled.

I said that, according to the I.I.I., the insurance market in California is healthy and competitive, and, for the most part, events like the wildfires are already factored into rates.

That was clearly the wrong thing to say.

So its figured into the premiums? my friend said. Why isnt that the case on the hurricane coast? Weve always known there will be a hurricane some time; why cant that be factored into the rates?

He raised a good point. Why is it that now, even when there hasnt been a hurricane in coastal New York for many years, companies will no longer write coastal risks " or if they do, it is with significant limitations/deductibles and at astronomical rates?

I appreciate the work the I.I.I. does on behalf of the industry toward improving our image, but that press release saying the wildfires were not going to affect premiums is hard to explain to our clients.

People, including me, have to wonder why the California wildfires are different than the East Coasts hurricanes. California is guaranteed to have a fire every year, but hurricanes are hit or miss. Even though the costs will be in the billions, how can the industry factor the cost of fires into premium rates in fire-prone areas, but not so for hurricanes?

And how widespread is coastal anyway? Recently, my agency had an account cancelled by a fine insurance company after more than nine years because they were too close to water. We went to the site to confirm, and found, about 50 feet from the property, a small stream that I could step over (more like a dry creek bed). I went back to explain the water to my company, but my protest fell on deaf ears. I was told the reinsurers are calling the shots, and that I needed to replace the coverage.

This week, I was faced with another risk " this one was non-renewed by a standard carrier and moved to the excess lines market. But I know this risk belongs in the standard market, so we sought coverage with one of our companies that writes this class of business. The problem is its underwriting department is not located in New York State. The underwriter e-mailed us, stating the property was too close to coastal water for the company to consider.

I pinched myself again. This is an area I live in and know quite well. The underwriter looked at a map and apparently confused inland water " water that would have nothing to do with peril at the time of a hurricane " with coastal water. So I called our marketing representative and the resident vice president to voice my discontent. I even threatened to take them to the location to see it themselves. Luckily, the marketing representative knows the area and she was able to resolve the issue for my client. Id like to thank this insurance company for stepping up because I know this is a great risk, but we need to ask ourselves: why does it have to be so hard to write property risks anywhere on Long Island?

Life is not fair, and living anywhere near the coast these days makes it seem even less so. Theres a solution for this problem: underwriters need to consider actual risks and not simply refuse a policy based on perceptions.

Id like to end on a positive note " a good example of what a company can do to change the publics perception of our industry. Though I promised myself I would not name companies in this column, this is extraordinary, and the company deserves the positive acknowledgement. Our office insures some high-valued homes in California, which are insured with AIG private client. In the middle of the firestorms, AIG went out and sprayed fire retardant chemicals on their insureds homes and surrounding vegetation to prevent further loss. What a great idea. While most people damn insurance companies for what they dont do for their customers, its nice to see a company that does something like this. This is what I call service, and PR.

Taking that preventative measure cost AIG more than a million dollars, but their sound reasoning in saving these homes would save the company more in the long run. Its simple risk management and value added service " that which we say should be done, but dont always do. And the positive perceptions AIG created among its customers in California cant be bought.

I hope that well see similar positive things done by companies on the hurricane coast soon.

N. Stephen Ruchman is president of Ruchman Associates Inc. in Rockville Centre, N.Y. and a past president of the Professional Insurance Agents of New York State Inc. As an active supporter of PIANY, Ruchman also served as first vice president and vice president of the association. He also chaired PIANYs Convention and Membership committees. He is a member of PIANYs Government Affairs, Nominations and Membership Programs Committees. Ruchman also is chair of the Long Island Advisory Council. He is a member of PIANYs Political Action Committee where he serves on their Executive Committee.