The wildfires that destroyed hundreds of homes created an estimated $2.04 billion insured loss.

The commissioner, who held a series of town hall hearings to listen to resident complaints in the hard-hit areas around San Bernardino and San Diego, said he was having a Firestorm Strike Force in his office probe allegations that carriers violated the Unfair Practices Act.

In a statement released yesterday, he said: "It is clear that the survivors of the firestorm have experienced serious hardships because of the way that insurers have handled the aftermath of this disaster."

Sam Sorich, president of the ACIC in Sacramento, said the group is "disappointed" Mr. Garamendi said insurers were "?screwing their policyholders big time.' Insurers, in fact, are doing the best they can to help their customers through this difficult time."

"After all, insurers are in business to provide a service and to keep their customers as satisfied as possible," he added. "It makes no sense for an insurer to ?screw' its policyholders and expect to stay in business."

Mr. Sorich suggested that many complaints could have been avoided if the department was proactive, "We've heard a great deal since last year's fires from the department of insurance, but what did we hear from the department before the fires?"

Noting that the department's budget is over $130 million, he said that "it seems to us that the department could have found some funding within that huge budget to better educate consumers so coverage issues that are now being discussed could have been avoided."

Insurance companies, Mr. Sorich added, had immediately responded to the plight of their customers by establishing assistance centers in burned-out areas "even as the fires still raged.''

Mr. Garamendi said issues that emerged at his town hall sessions were policies that did not cover the cost of rebuilding and multiple adjusters handling an individual claim.

He called on the State Legislature to pass what he called a Homeowners Bill of Rights package of five bills dealing with policy disclosures concerning:

? Rebuilding.

? Providing flexibility for rebuilding at a different location.

? Requiring policy renewals unless there are three claims within three years.

? Setting requirements for cash valuations,

? Creating a mediation program for wildfire victims.

Mr. Garamendi's office did not immediately respond to questions about his reported remarks.