In an effort to block a potential meltdown of the California homeowners insurance market, Insurance Commissioner John Garamendi on Wednesday ordered the state's high-risk insurance pool to extend its residential earthquake and fire insurance statewide.

Garamendi's action, which he called "strictly a stopgap, short-term measure," means that all homeowners will be able to buy at least bare-bones residential coverage even in areas considered at high risk for earthquakes. The coverage comes from the California Fair Plan, the industry-financed insurer of last resort that, until now, has mainly insured properties in the inner city and brush-fire areas.

The move appears to defuse--at least temporarily--the threat that a squeeze in availability of homeowners insurance will disrupt real estate sales and hurt California's economic recovery. The squeeze came when several large insurers, including 20th Century Insurance Co. and Farmers Insurance Group, abruptly stopped writing new homeowners and earthquake policies after suffering huge losses from the Northridge earthquake.

Garamendi's order, which takes effect July 1 and lasts for nine months, grants the Fair Plan a 100% hike in its earthquake insurance rates and a 20% hike in its fire rates. The new earthquake rates of $2.50 per $1,000 of coverage are slightly higher than the current state average.

Garamendi also called on Gov. Pete Wilson and the Legislature to impose a temporary moratorium prohibiting insurers from refusing to renew homeowners and earthquake coverage. The rate hikes and proposed moratorium are intended to keep insurance from flooding into the Fair Plan.

Marjorie M. Berte, Gov. Wilson's insurance adviser, said of Garamendi's order: "It's fine to the extent that it solves an immediate availability crisis."

Insurers, however, warned that the action does nothing to reduce companies' exposure to devastating earthquake losses and could make the problem even worse.

Since the Fair Plan simply passes on its losses to California insurers according to their market share, Garamendi's action "offers nothing but an unlimited and automatic assessment on the companies for whatever deficits may occur," Bill Sirola, spokesman for State Farm Mutual Automobile Insurance Co., said Wednesday.

Although Garamendi has broad authority over the Fair Plan, it is a private fund that has no link to the state treasury. It was created after the Watts riots of 1965 as a means of providing insurance in urban areas that traditional insurers considered too risky.