20th Century Ordered to Pay in Quake Case

A Los Angeles jury Wednesday awarded a North Hills woman $65,000 after finding 20th Century Insurance guilty of breach of contract and bad faith in its handling of the earthquake damage claim on her home.

Renee Zabel, who has lived in her home for 34 years, filed a damage claim shortly after the January 1994 Northridge earthquake. 20th Century sent out a claims adjuster who inspected Zabel’s home and, after allowing for deductibles in her policy, paid her about $13,000 to cover damages.

More than a year later, Zabel suspected that damage to her property had been overlooked, including damage to a chimney and garage, so she filed a supplemental claim.

Her home was reinspected, and the second adjuster told her the company had missed a lot of damage earlier, Zabel said. But 20th Century refused to pay her new claim, citing a one-year statute of limitations provision in her policy, so she sued the company.

“This is a very important case for 1,700 people out there because it shows 20th Century’s statute of limitations defense is baloney,” said Tom Girardi, one of Zabel’s attorneys.

About 1,500 to 2,000 Northridge quake damage claims were denied by 20th Century based on its interpretation of the time limit to file a claim.

David Prestholt, another of Zabel’s attorneys, said, “We did not get the punitive damage award. But what is wonderful, the jury has found that 20th Century’s [time limit] argument is wrong.”

But Ric Hill, a 20th Century spokesman, disagreed, and said that another quake damage case, similar to Zabel’s, had been thrown out of court by a judge only last week. “We still believe we’re correct on the [time] provision,” Hill said.

Zabel said the $65,000 won’t cover all her repairs, and that she was disappointed the jury did not award her any punitive damages.

Zabel also remains bitter over how 20th Century handled her claim, the poor work done by the first claims adjuster and the years she’s waited to get the money she believes she was owed.

“My shortcoming was I went totally by their first adjuster. I believed them,” Zabel said. “Later, the next [adjuster] said the first one had made a big mistake. But 20th Century never dealt with it, and said it was an error or an oversight.”

Hill said the company would not appeal the decision, and that the case had been resolved on favorable financial terms.

Hill said that 20th Century had offered to settled the case before trial for $100,000.

After the Northridge quake, the Woodland Hills-based insurer was hit with 400 to 500 lawsuits by policyholders over disputed quake damage claims.

But 20th Century has settled many of the claims out of court. Hill said about 170 lawsuits are still active.

All told, 20th Century received 46,000 quake damage claims from policyholders, and it expects its final total for quake damage claims to reach $1.04 billion.