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Posted on Monday, January 08, 2001 - 1:40 pm:   

As an independent adjuster who handled over 200 Northridge Earthquake claims for 20th aka 21st Century Insurance Co., I can state without reservation that anyone who feels they did not get a fair deal either had a coverage problem or was absolutely unreasonable in their demands regarding their claims. The carrier did not send their own contractors, in fact, the insured chose the contractor on every one of my claims and I never dealt with the same one twice. We always got an agreed price based on my figures, depreciation and OH&P were not withheld and guaranteed replacement cost was paid even when it exceeded policy limits. I wouldn't want to be involved in any of these remaining claims as they are misguided at best and false and/or fraudulent at worst. The adjusters that I know were amazed at the fairness and promptness exhibited by this carrier. They were first class in my opinion.

R.D. Hood (Dave)
Posted on Monday, January 08, 2001 - 11:50 am:   

21st Century Faces Possible Class Action Lawsuit

On Jan. 3, 2001, a California law firm filed a complaint against 21st Century Insurance Co.
alleging that the company "mishandled" home insurance claims after the 1994 Northridge

The lawsuit was filed on behalf of 21st Century policyholder Stephanie Baruch, and seeks
class action status that would cover more than 37,000 21st Century policyholders who made
claims following the Northridge earthquake.

Baruch alleges that 21st Century tried to save money by lowballing repair estimates and
denying subsequent claims. 21st Century allegedly sent unqualified estimators, contractors,
and engineers to evaluate damaged homes, many of whom either underestimated damages or
attributed them to pre-existing conditions that would not be covered by 21st Century.

When policyholders found additional damages and tried to make new claims, the lawsuit
alleges, 21st Century systematically "denied the supplemental claims on the basis of a time bar,
instead of addressing each claim pursuant to the terms and provisions of the policy."

"There was a pattern of conduct designed to defraud policyholders," says Brian Kabateck, the
attorney who filed the complaint. "In addition to having all 21st Century earthquake claims
reopened and reviewed, we're seeking to halt the allegedly unethical business practices that
created the insurance mess to begin with."

"We are familiar with [Baruch] and her case, and the details of her case do not fit with what I
know of the complaint," says Rick Hill, vice president of communications for 21st Century.

21st Century says it never had a policy of denying claims based upon time limits. Hill says
Baruch's complaint omits important facts about her case, including that she did, according to
company records, receive a supplemental claim payment more than a year after the
earthquake. The company denied a third claim because Baruch filed it in 1998, more than four
years after the original damage, and because 21st Century believed it had already paid for the
repair in question, Hill says.

The complaint is the first Northridge-related lawsuit filed under legislation that went into effect
on Jan. 1, 2001, allowing policyholders to sue their insurance companies to reopen Northridge

The Northridge earthquake resulted in huge payouts for home insurers. 21st Century alone
paid $1.2 billion in claims.

After the earthquake, insurers including 21st Century, Allstate Insurance Co., Farmers
Insurance Co., and State Farm Insurance Co., avoided allegations of claims mishandling by
paying money into non-profit foundations set up by ex-Insurance Commissioner Chuck
Quackenbush. It was later found that Quackenbush used the funds, which totaled far less
than the billions of dollars the companies would have paid in fines, for his personal and political
gain. In November 2000, the California insurance commissioner and attorney general filed a
complaint in state Superior Court seeking to void those donations, calling them illegal and
beyond Quackenbush's authority.

Author: Heather Williams

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