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Oct 09, 2001
CONTACT: Doug Heller - 310-392-0522 x309
Homeowner Insurance Reform Signed by Davis, Ends Quackenbush-Era Policies that Favored Insurers
Consumer Group Says SB 658 Will Help Policyholders in Future Disasters Avoid Problems of Northridge Quake, East Bay Hills FiresSacramento -- Important consumer protection legislation, SB 658 (Escutia) sponsored by the Foundation for Taxpayer and Consumer Rights (FTCR), was signed into law by Governor Davis late Monday. The legislation provides disaster victims and other policyholders with protections against a series of low-balling and delay tactics used by insurers after the Northridge quake of 1994 and other natural disasters such as the East Bay Hills fires.
"Californians victimized by the elements should not be victimized a second time by their insurance company," said consumer advocate Douglas Heller, with the Foundation for Taxpayer and Consumer Rights. "Under the Quackenbush administration, insurance companies were allowed to extend and manipulate the claims process at a great expense to disaster victims. Only when Mr. Quackenbush and his administration were investigated did we learn the extent of the problem. This legislation rewrites California insurance law to ensure that future disaster victims won't face the kind of double-whammy that Northridge victims suffered through during the insurance claims process."
According to FTCR, SB 658 offers practical reforms to an insurance claims process that does not currently provide an even playing field for policyholders in the wake of tragedy. The bill, authored by State Senator Martha Escutia, is the second major reform jointly developed by FTCR and Senator Escutia to respond to the Quackenbush scandal that led to the former Insurance Commissioner's resignation. Last year's SB 1805 requires the Department of Insurance to place examinations of insurance company conduct on the internet for public review.
SB 658 was developed in consultation with other consumer groups, disaster support groups, insurance adjusters, consumer attorneys and the insurance industry. Under the new law:
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