Insurance Worries Now Rack Shattered Home’s Inhabitants

It’s a warm spring day on Flanders Street in Granada Hills, and the rich aroma of chocolate brownies wafts out of Michele Arso’s house.

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Wearing jeans, a yellow T-shirt and a bright orange vest printed with pictures of canned fruit, she greets a visitor on her porch with a smile.

But something is wrong.

It is not the happy smile of a storybook mom in a happy-go-lucky suburb.

It is a survivor’s smile. The bitter, ironic smile of a quake insurance victim in the Valley. Year 2.

To anyone familiar with the trauma that earthquake survivors have faced in dealing both with broken homes and broken promises, it is a miracle that she can grin at all.

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Arso’s twisted tale of adjusters, geologists and lawyers unfolds with a tour of her house.

Her brick fireplace stands out from her living room wall by a few inches. Cracks cross her ceilings like zigzags slashed by a child’s crayons. Glass that fell out of the frames of photographs of her kids has not yet been replaced. Plastic toys and broken plaster lie at the bottom of her swimming pool. And underfoot, the home’s foundation, she says, is “shattered.”

The result of the 6.7 quake on Jan. 17 last year?

No, says the elementary school teacher. Most of the damage came during the 5.3 aftershock on March 20.

And that’s why she looks longingly across the street at the huge blue refuse bins resting at the curb of two neighbors, where quake renovation work is well under way.

A Brooklyn native who moved to the San Fernando Valley in 1978, she had little respect for earthquakes until knocked off her feet in 1987 by the Whittier Narrows temblor.

Insurance? She thought that the long-distance shaking of Whittier was as bad as it got--and that she could pay for damage from savings.

On Jan. 17, 1994, the Northridge quake shattered her illusions. A gas-main explosion a few blocks away at Balboa Boulevard and Rinaldi Street sent fireballs into the sky, lighting the dawn so fiercely that she didn’t need the flashlights she’d stored for this day.

Her home rocked but didn’t break, she says. A contractor figured damage at $40,000, and she obtained a government loan for that amount. A homeowners insurance adjuster examined the house to settle a minor claim on water damage. A city building inspector green-tagged the house despite a slightly shaky chimney.

None found any serious structural damage.

Now she and her husband, Gary, a carpenter supervisor for the city of Los Angeles, counted the days until they could purchase earthquake insurance. When a moratorium lifted March 1, they paid their first premium right away.

“We were relieved that we were finally protected,” she said. “Talk about guilt! I was feeling real bad. Gary was saying the decision not to buy was my call and he shouldn’t have listened to me. I said, ‘Yes dear, you were right.’ ”

Gary had only 19 days to bask in the warm glow of self-righteousness.

On March 20, the Arsos and their two children had enjoyed a day of sledding in Frazier Park when they returned to their car to hear radio news bulletins of a magnitude 5.3 aftershock that had bombed the Southland. Epicenter: Granada Hills.

“We were like lunatics driving home, worrying about what we’d find,” said Michele.

What they found has all but ruined their lives.

“It was like a nightmare revisited,” said Michele.

Except worse. Much worse. Everything that had almost broken on Jan. 17 now came tumbling down. Sliding glass doors had blown apart. The garage door cracked open. And this was when the pool and foundation shattered.

At this point in her story, Michele pulls a stack of legal folders off a desk and plops them on her kitchen table. Sifting through them, her voice cracks and her eyes well up with tears.

“We thought, ‘Thank God we have insurance now.’ I called and made a claim,” she said. “We were so naive. This is where the bad faith started.”

The first free-lance adjuster that 20th Century Insurance sent to handle their claim, she said, worked for a few weeks, confirmed the extent of their loss after ordering a structural engineering report, then disappeared. “Back to Oklahoma, Nebraska or someplace,” she said.

The next adjuster 20th Century hired sent the Arsos a letter saying he was on their case, and was never heard from again. A third adjuster ignored them for months, she said.

A 20th Century spokesman declined to comment on Arso’s claims.

Gradually, the Arsos came to believe that 20th Century was trying to wiggle out of paying their claim by contending that their home’s damage came from the Jan. 17 quake, and not from the March 20 aftershock. They were made to feel like criminals instead of victims.

A fourth adjuster forced them to swear under oath that their damage came from the aftershock, and began to investigate their veracity with neighbors. The insurance company hired its own contractor. It hired its own structural engineer. It commissioned a geological report. It paid her first contractor $100 to testify under oath about his original bid.

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More months ticked by. The Arsos declined a settlement offer of about 20 cents on the dollar. The insurer accused Michele of harassing its executives with phone calls. She says she was just trying to find someone to listen to her story.

So the case has naturally reached the legal system. Last Thursday, the Arsos sued 20th Century in Van Nuys Superior Court for breach of contract just before the first anniversary of the 5.3 aftershock.

The Arsos resent the time that their claim has robbed from their lives. They resent the strain it has put on their marriage.

It’s Year 2 for earthquake victims in the Valley. Little wonder that, in some homes, even the sweet aroma of brownies can’t mask the smell of despair.