Allstate Insurance, which has stopped writing coverage forhomeowners in many hurricane-vulnerable areas, said yesterday theywill no longer cover earthquake damage wherever they are legallyallowed to drop the coverage.

Some 352,000 policyholders nationwide will be affected by thedecision not to renew the coverage, said spokesman MikeTrevino.

He said the company's decision will mean it gives up $60 millionpremium from the earthquake endorsement portion of its homeownerspolicies.

Mr. Trevino said it was possible that company would see afurther reduction in premiums written from homeowners who decide toswitch to another carrier altogether.

Allstate, said Mr. Trevino, is attempting to place itshomeowners policyholders' earthquake risk with other carriers. Inthe case of customers in Washington State, he said the company isarranging for customers to get coverage through the specialtycarrier GeoVera of Fairfield, Calif.

The insurer is non-renewing because “as we have looked at theexposure, that's not a risk we want to continue to insure.” Earlierthis year, as a result of what the carrier said was a desire tolimit hurricane exposure, Allstate stopped renewing home insurancebusiness in New York City, the adjacent northern suburb ofWestchester County and all of Long Island, N.Y.

The company currently has 407,000 policyholders that haveearthquake coverage. Mr. Trevino said Allstate is continuing toprovide 55,000 customers in the states of Connecticut, Kentucky,Florida, Pennsylvania, New Hampshire, Rhode Island and New Yorkwith quake coverage.

He said in those seven states the insurer is havingconversations with regulators, or has not made a decision on whataction it will take. He said Kentucky mandates the quakecoverage.

In California, insurers that sell homeowners insurance arerequired to provide coverage as part of the California EarthquakeAuthority, with participation based on their share of the market,so policyholders will not be affected there, according to NormanWilliams, speaking for the state's insurance department.

Mr. Trevino agreed that “our actions do not impact Californiaand we will continue to participate in the CEA.” Californians whohave Allstate coverage through CEA will remain covered, he said.The policies are not considered name offerings, “CEA is on the risknot Allstate,” said Mr. Trevino.

Oregon regulators are not immediately concerned by the Allstatedecision, said Insurance Division spokesman John Piper. “It appearsAllstate is the only company that is going in this direction, anddoesn't appear at this point to be a trend,” he said.

However, Stephanie Marquis, speaking for Washington InsuranceCommissioner Mike Kreidler, said he is very concerned that if onecompany takes such an action, more might follow.

Bill Marutsos, vice president, Aon Construction Services Groupin Irvine, Calif., said that for highrise condominiums and othervertical home construction in California, quake coverage is notreadily available at reasonable price.

He noted that since insurers' ability to provide the coverage islimited by their reinsurance, capacity is likely to continueshrinking. Since last year, he said, the cost of coverage hasincreased 50-to-60 percent with reduced limits.