20th Century Insurance, which was almost knocked out of business by $1 billion in Northridge earthquake insurance damage claims, has decided to resume offering homeowners earthquake insurance.
20th Century will offer earthquake insurance as an option to its remaining 68,000 homeowner policyholders as of Feb. 15.
This quake coverage will not be part of the new California Earthquake Authority. Instead, it will be underwritten by a subsidiary of American International Group, the big New York-based insurer that is now 20th Century's largest shareholder.
Although there is some symbolic significance in this move, 20th Century is doing it because the company has lost more than 120,000 auto policies since the Northridge quake, because many customers like to have both their home and auto coverage with the same insurer.
"That was the clear message we received from some of our automotive customers as we sent out nonrenewal homeowner notices," said Rick Dinon, a 20th Century spokesman.
20th Century Industries, the parent company based in Woodland Hills, has primarily been an auto insurer since it opened in 1958. But in the 1980s it started offering homeowners insurance, and in keeping with state law, it had to offer earthquake insurance as an option.
When the Northridge quake struck in January 1994, most of the company's homeowner policies were in Southern California.
As its quake damage bills soared, it was uncertain whether 20th Century could stay in business, and the state insurance commissioner allowed the company to exit the homeowners insurance business.
So 20th Century has been letting its homeowner policies lapse, and it has not had any quake policies in force since last summer.
20th Century was hit with 46,000 Northridge quake damage claims, and about 200 homeowners sued the company over unresolved quake claims.
Encino attorney Jeff Lesser represented one of those 20th Century homeowners, and last summer in Superior Court, his client won his case and was awarded $75,000. 20th Century is appealing part of that case.
Now that 20th Century is reentering the quake insurance market, Lesser said, "some would question whether the insurance protection being offered is anything other than an illusion."
20th Century Industries' stock closed Tuesday at $16 on the New York Stock Exchange, up 12.5 cents.