THE EARTHQUAKE INSURANCE WARS

A year after the 1906 Santa Rosa earthquake, the insurance situation was turning ugly. As earlier discussed here, fewer than ten companies paid their losses in full, some insurers declaring bankruptcy to avoid paying a cent, and some companies dragging their heels for months before striking deals to pay a fraction of what was really due. But apparently only the Connecticut Fire Insurance Company truly played hardball, inviting some policy holders to sue them.

At least two Santa Rosa claims slogged through the courts for five years past the disaster – yet the record shows that the firm was highly esteemed for fairness after the San Francisco earthquake. The claims here hardly seem unique; the cases that reached the California Supreme Court both concerned disputes over whether the goods in a store were destroyed by fire in the moments before or after the building collapsed, a situation that the insurance companies surely faced in San Francisco as well.

So why did Connecticut Fire dig in over Santa Rosa’s claims? Maybe because they could. A report on San Francisco insurance settlements prepared for the SF Chamber of Commerce in November, 1906 (PDF) was considered the final word on the subject, and it praised Connecticut Fire as one of the very few “dollar-for-dollar” companies. There was also scant media attention given to the handful of still-unresolved Santa Rosa cases. Between 1907 and 1912, I can find only five small items in major California papers about those ongoing legal battles.

A few weeks after the quake, Connecticut Fire Insurance Company president John D. Browne proclaimed, “All clearly Total Losses must be paid in full. We must retain our reputation for square dealing.” They did retain their reputation, but the courts had other views about their “square deals;” it appears that the company lost every appeal.

CONNECTICUT REFUSES TO PAY ITS SANTA ROSA LOSSES

Five suits were commenced in the Superior Court of this county on Wednesday against the Connecticut Fire Insurance Company of Hartford, the company who refused to pay its losses in Santa Rosa at the time of the great fire last April. These are the first suits of like nature to be commenced in Santa Rosa.

The plaintiffs in the suits against the Connecticut and the amounts claimed are Naomi E. Davis, as executrix of the estate of H. S. Davis, $1,000; Max Rosenberg, $1,999; Frank C. Loomis, $1,000; O. Fountain and Santa Rosa Savings Bank, $1,000; R. C. Moodey, $500.

The complaints recite that, the defendant company has refused to pay the claims made against it by the plaintiffs. The Hon. T. J. Geary is the attorney for all the plaintiffs.

– Press Democrat, April 4, 1907

MORE INSURANCE CLAIMS SETTLED
Trader’s of Chicago Pays 70 Cents on the Dollar and German National 50 Cents

Attorney Thomas J. Geary, who has had charge of most of the local insurance cases growing out of the great fire of last April, has succeeded in arranging a settlement of the claims owed here by the Trader’s of Chicago and German National Insurance companies. The former pays 70 cents and the latter 50 cents. Among those who held polices…

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– Press Democrat, April 10, 1907