Nation’s Insurers Hit by 30 Quake-Related L.A. Lawsuits : Homeowners: Victims of Northridge temblor allege 16 companies stalled on claims, mishandled asbestos problems.
More than 250 victims of the Northridge earthquake filed a related set of lawsuits in Los Angeles Tuesday accusing some of the nation’s largest insurers of foot-dragging on claims, leaving customers underinsured and, in several cases, exposing people to health hazards by failing to warn them about unsafe levels of asbestos in their damaged homes.
More than 30 separate lawsuits were filed in Los Angeles Superior Court, with plaintiffs seeking full payment of their claims plus, in some cases, damages for mental and emotional distress.
Michael J. Bidart, one of the plaintiffs’ lawyers, said the allegations range from “good, old-fashioned low-balling of claims estimates to outright egregious fraud.”
The defendants are 16 insurance companies, including market leaders State Farm Mutual Automobile Insurance Co., Allstate Insurance Co., Farmers Insurance Group and 20th Century Insurance Co.
The filing of the suits on the anniversary date of the Northridge earthquake has legal as well as symbolic significance, Bidart said. Although some insurance companies have waived the statute of limitations for filing suits based on their handling of claims, the legal precedents are ambiguous and certain types of claims may have to be filed within a year of the catastrophe, he said.
Bidart said that while each lawsuit involves a different set of facts, one of the most striking themes to emerge from the allegations is that insurers seemed unprepared to deal with asbestos that was exposed by earthquake damage.
“Carriers mishandled asbestos problems across the board,” he said.
Some plaintiffs accuse their insurers of simply ignoring or underestimating the expense of asbestos mitigation, while others contend that their companies were aware of dangerous levels of asbestos contamination in homes and “actively concealed it” from the policyholders, Bidart said.
In one lawsuit, Martin C. Coren described a yearlong struggle with his insurer, San Antonio, Tex.-based United Services Automobile Assn., over severe quake damage to his Northridge home.
Coren alleged that the first insurance adjuster assigned by USAA arbitrarily attempted to keep the claim under $125,000, whereas the actual damage was about four times that amount. The adjuster instructed a contractor to ignore damage that would boost the claim beyond that level, according to the complaint.
Thus, the preliminary inspection failed to note--among other things--severe cracks in the foundation and stucco damage that revealed asbestos, Coren said.
A USAA spokesman said that he was unable to comment on the specific case. But he said the company believes it has resolved 89% of its 8,200 earthquake claims to its customers’ satisfaction.
He added that USAA, which estimates its earthquake losses at more than $250 million, has created a catastrophe team in Los Angeles with an ombudsman who is available to help resolve disputes.
In another lawsuit, Harry and Dorothy Hasekian of Sherman Oaks allege that their insurer, Pasadena-based National Automobile & Casualty Insurance Co., told them that their quake damage would fall below their $12,000 deductible, whereas a partial list of their destroyed or damaged belongings exceeded $60,000 and there was more than $200,000 in structural damage and asbestos contamination to the house.