Quake Victims, Insurance Carriers Meet Head-On at Hearing : Aftermath: More than 300 turn out for often heated town hall meeting. Disgruntled victims of temblor and representatives of several companies state their cases.
VAN NUYS — It was a showdown between quake-weary homeowners and the insurance companies they are still battling six months later.
More than 300 people turned out for the confrontation Wednesday night, filling an auditorium at Birmingham High School in Van Nuys for a hearing presided over by state Sen. Art Torres (D-Los Angeles), chairman of the Senate insurance committee and the Democratic nominee for insurance commissioner in the November election.
Besides disgruntled victims of the Northridge quake, the speakers included representatives of State Farm, the state’s largest carrier with 20% of the homeowners market, and No. 3 Farmers Insurance Group.
Nettie Hoge, head of consumer services for the California Department of Insurance, also participated in the often heated town hall meeting that Torres conducted as an official hearing of the insurance committee.
Hoge told the crowd that state Insurance Commissioner John Garamendi had persuaded Woodland Hills-based 20th Century Insurance Co. to restore homeowners coverage to about 14 of its customers whose policies the company recently canceled.
20th Century received so many quake claims that the state insurance department granted the company special permission to get out of the homeowners coverage business. One of the conditions, however, was that the company offer its customers two more annual renewals. Some of its policyholders have complained recently that the company was seizing on technical excuses to refuse immediately to renew their policies.
Many people in the audience brandished signs such as “Boycott 20th Century” and “20th Century, What Did You Do With Our Premiums?”
Torres said 20th Century was invited to send a speaker to the meeting, but declined. However, when Torres asked if anyone from 20th Century was in the audience, two people raised their hands. Rick Dinon, a senior vice president, said the executives were there because they hoped to “correct some misinterpretations of the company’s actions, motives and finances.”
“It hurts,” Dinon said of the homemade signs criticizing the company. “We hope we have the respect of our customers and we most assuredly respect them.
“It hurts a lot to be placed in an adversarial relationship with our customers. It is disappointing we can’t continue to offer them the kind of protection we have in the past.”
When an earthquake hits, “much of the suffering is from the reprehensible conduct of the insurance industry adjusting the earthquake loss,” said George Kehrer, executive director of Community Assistance Recovery, or CARE, a Northridge-based consumer group he said represents more than 5,000 property owners.
“Adjusters swarm into the state like killer bees,” Kehrer said, drawing a standing ovation.
Torres told the group that many of the complaints he has received have come from people who fear their company will abandon them. But he noted that Garamendi is proposing a statewide insurance industry pool as well as supporting proposals for national disaster insurance.
“It’s hard to be patient,” he said. “People in northern California are still dealing with insurance companies from the Loma Prieta quake” in October, 1989.
Bill Gausewitz, of Farmer’s Insurance, said his company had resolved 27,241 quake-related claims, about 90% of those it had received. Of those, 7,877 were dismissed without payment and the others received compensation, he said.
Torres asked Gausewitz if Farmers had received complaints that it refused to pay the true cost of earthquake repairs.
“Not that I know of,” Gausewitz replied, drawing hoots and jeers from the audience.
Hoge said the insurance department has received complaints of low payments by virtually all insurance companies hit by Northridge quake claims.
Torres, whose committee is wrestling with many quake-caused problems, including a growing homeowners coverage crisis, said he arranged the meeting to give angry quake victims a chance to air their grievances.
Disillusioned policyholders have inundated his Los Angeles and Sacramento offices with complaints, he said, ranging from switching adjusters in the middle of the claims process to “low-ball” offers to settle to delays receiving payoff checks. Some accused their insurance carriers of breaking promises or lying to avoid paying claims.
