Insurers Take Legislature, People of California to Court
The insurance industry has filed suit today in the California Supreme Court to undo one of the key consumer protections to come out of the Quackenbush-Insurance scandal. The suit seeks to stay implementation of SB 1899 (Burton), which allows certain Northridge quake victims to take an unfair insurer to court, if they were previously denied that right due to a statue of limitations.
“The insurance industry has spoiled Thanksgiving for many quake victims who have waited five years for a fair hearing of their insurance claim,” said Douglas Heller, consumer advocate with The Foundation for Taxpayer and Consumer Rights. “While the insurance industry’s lawsuit should be dismissed by the Supreme Court, the Legislature must look to further contain this industry, which resists accountability at every turn. It is a real sign that California needs deeper insurance reform to protect policyholders from this devious industry.”
Advocates noted that the primary insurance accountability reform produced by the Legislature in 1999 was also attacked by the industry after passage. It was subjected to a $50 million referenda campaign by the insurance industry.
According to consumer advocates, thousands of Californians who lived through the January 17, 1994 Northridge earthquake have yet to receive full and fair compensation from their insurance company to cover the costs incurred as a result of the quake. Many of the victims received partial settlements for their earthquake claim and others received no compensation after being told that the damage was below their policy deductible. In subsequent years, families have found damage that was ignored or missed by the original adjuster, yet intransigent insurers have stonewalled these claims leaving homes, condominiums and apartment buildings in disrepair.
SB 1899 provides policyholders, who were denied the right to sue their insurer because of a one year statute of limitations, access to the courts to seek remedy against the unfair and illegal behavior of their insurance carrier. It reopens and extends the statue of limitations for filing suit against an insurer that has unnecessarily denied or undervalued a legitimate earthquake related claim for one year.