WHAT'S the point in buying homeowner's insurance if when you make a claim you are either punished with a boost in the premium charges or dropped entirely?

There's an answer from none other than California Insurance Commissioner John Garamendi, who spoke to Oakland's Black Board of Trade on Thursday.

When I asked that question, he thought for a moment, then said: "Well, it seems just to make the homeowner angry."

Garamendi spent some time in his remarks telling us how insurance companies are defrauding consumers. I hesitate to use the word "defrauding," but in my view that is exactly what it is when people pay for something and get nothing in return.

Garamendi says he has been trying to correct this wrong and many other problems in the insurance business throughout California but is constantly faced with the opposition, a powerful cabal of lobbyists in Sacramento who block votes in the Legislature that would approve reform measures.

Moreover, he says the insurance companies response is that less than 1 percent of their customers lose their insurance when they file a claim. "But that means 45,000 homeowners have lost their insurance completely because they made claims," said Garamendi.

In the case of homeowners' insurance, he is sponsoring a bill that would require thecompanies to tell new buyers exactly what will happen if they file a claim, and give other information that would let homeowners know the consequences of filing a claim.

"It's the use it and lose it syndrome," the commissioner said to describe what happens.

He reminded the audience of how insurance has become a necessary part of everyone's life, from driving a car, owning a house, running a business and getting medical care. In just about every case, the consumer needs more protection from insurance companies, which he says seem more interested in how much money they can make for themselves, not the consumer.

You begin to believe after listening to the commissioner that insurance is as inevitable as death and taxes, and as unwelcome.

"A community cannot climb the economic ladder without insurance," he said, pointing out how an individual starts with car insurance on his or her first car. If the young driver doesn't get the insurance, he or she will be stopped by police, the car towed and the driver fined $500. So you have to have insurance."

In the next step, if this person wants to start a business, he or she must have business interruption insurance and workman's compensation insurance if they're employees. When you buy a house, you must have title insurance, then home owners' insurance.

There's just no escape.

Garamendi deplored ZIP code profiling, which means people who live in less desirable ZIP codes pay more than wealthier communities because they are presumed to have more accidents.

Two counties — Los Angeles and San Francisco — have insurance available that allows someone to drive legally. But it is minimal, covering only the liability for someone else's car, not your own, if you are in an accident.

The commissioner wants legislation that would require all insurance companies to allocate 1 percent of operating expenses to Community Investment loans. He has delayed introduction of the legislation until the January filing period because he was unable to round up enough votes for it this fall.

He fears higher costs for all insurance will cause employers to increasingly ask employees to pay more of their health care costs and, in some cases, simply to drop health benefits for new employees.

There is already a problem at government-run hospitals where the uninsured go to county and city emergency rooms when they feel ill. These are costs that eventually are paid by taxpayers, said Garamendi.

"By the end of the decade, unless there is reform, 50 percent of all employers will offer no health insurance," he predicted. "Employees who will feel the cuts most will be those in low-paying jobs."

So are there any good insurance companies? Yes, there's one right under our nose, he says. 

An award was made to Oakland's Golden State Mutual Life Insurance Co., described as the only African-American owned and operated insurance company in California. Garamendi praised the company for its policies that benefit individuals and families in Oakland and the Bay Area.

What can the consumer do about the others?

Garamendi advised people to complain to their legislators and ask them to support reform legislation that is overdue and critically needed.

E-mail Peggy Stinnett at pstinnett@angnewspapers.com.