At Last, Quackenbush Acts His Part

Insurance Commissioner Chuck Quackenbush is starting to act the part. Last week, the commissioner with a reputation for siding with insurance companies instead sided with homeowners whose damage claims from the Northridge earthquake were rejected by their insurers because they missed a one-year filing deadline.

Although Quackenbush’s announcement gives a morale boost to several hundred homeowners still fighting their insurance companies, it’s not clear whether his legal opinion will have any effect at all on ongoing litigation. In that way, Quackenbush’s position is better than nothing, but it’s a little late for many homeowners already embroiled in bitter settlement fights.

According to the opinion, insurance companies misread the law when they rejected homeowners who submitted damage claims more than a year after the January 1994 earthquake. Many homeowners learned about the filing deadline when they submitted claims based on damage discovered by contractors hired long after insurance adjusters had given their estimates. Problem was, some of those estimates were wrong because expensive structural damage can be tough to find until entire walls get ripped up. And it often took several months to a year for homeowners to get the work arranged and paid for.

The insurance commissioner argues, and we agree, that insurance companies should honor claims made within one year of the discovery of damage. Insurance companies contend that’s their policy too, but some have aggressively fought late claims with the contention that homeowners took too long to get work started or waited too long to report new damage. The commissioner intends the opinion to spur insurance companies to reexamine rejected claims and to encourage settlement of those already in the courts.

In the end, though, the courts probably will decide many of the cases pending against insurance companies and Quackenbush’s opinion is not likely to have as much of a positive effect as he, and we, might hope. Still, it’s nice to see him at least acting like the independent insurance commissioner voters had in mind when they made the post an elected office in 1988.