Monday, October 24, 2016




          Chuck Quackenbush is long gone from California after his scandal-ridden ouster from the state insurance commissioner’s office in 2000. He went on to live for awhile on the Big Island of Hawaii and subsequently has been a sheriff’s deputy in Lee County (Ft. Myers), Fla., where he shot and critically wounded a suspect in 2008 while the man allegedly resisted arrest.

          But the after-effects of Quackenbush, long known to his critics as “Quacko,” live on long after his emigration from this state and will surely be felt widely after the next significant earthquake.

          For Quackenbush is one of the main reasons why in a state where virtually every homeowner carries fire insurance, almost 90 percent don’t bother with earthquake coverage.

          Before Quackenbush’s tenure as insurance commissioner, which began in 1995, while most of the companies he regulated were still negotiating settlements for the billions of dollars in damages inflicted by the 1994 Northridge earthquake, almost 20 percent of Californians had quake insurance.

          But that number has been cut almost in half since, Quackenbush’s doing.

          “Believe me,” Quackenbush emailed a few years ago. “I get plenty of bad guys (as a deputy). The dark heart of Man is a frightening thing to behold.” Perhaps that means Quackenbush has done a little introspection since his days as one of the last Republicans elected to a statewide California office.

          He departed that office after six years rather than face impeachment in a scandal where he was charged with allowing insurance companies to compensate their customers far less than actual damages they suffered. In return, it was alleged, insurance companies set up “educational funds” with some of the money they saved. Those funds paid for public service TV announcements increasing Quackenbush’s name identification as he planned for a potential 2002 run for governor.

          Insurance industry figures and agents also contributed heavily to Quackenbush’s two campaigns for insurance commissioner, allowing him to outspend opponents handily. Insurance companies also contributed to his wife’s unsuccessful 1998 run for the state Assembly and to several of his pet non-profits.

          Of more lasting concern to today’s homeowners was Quackenbush’s cave-in to insurance companies which refused to sell any new property insurance in California after the ’94 temblor so long as they also had to offer quake insurance. Instead of using his considerable powers to order that companies like State Farm, Safeco and 20th (now 21st) Century stop selling ultra-profitable car insurance in the state until and unless they also sold quake and property coverage, Quackenbush devised a new outfit called the California Earthquake Authority (CEA), now the main seller of earthquake insurance here.

          CEA policies cost more than earlier ones, carry significantly higher deductibles and don’t cover fences, separate garages and other outbuildings that were routinely included in previous policies. This yields less coverage for higher premiums. There’s also the risk that the CEA might not be able to pay claims in full after the next big earthquake (the question is not if that quake will come, but when?) because its funds are limited to the premiums paid by policyholders. By comparison, national insurance companies have a much larger premium pool available in disasters, including money raised from selling other kinds of insurance.

          No wonder many fewer people buy quake insurance today as before Quackenbush so eagerly did the bidding of the insurance industry.

          Even today, the existence of Quackenbush’s CEA lets the big national insurance companies off the hook at the expense of homeowners.

          This didn’t perturb Quakenbush a bit the last time he discussed it with this column. “If customers decide not to buy the CEA policy, that’s their choice,” he said. “Only the market can decide what is a viable product.” The problem with that is the lack of a real market, since the large insurers still don’t sell new quake policies here.

          A few small firms offer better coverage than the CEA’s, but at even higher prices.

          Meanwhile, no politician has stepped forward to try righting the Quackenbush wrongs. The first one who did that, of course, would incur the undying wrath of the insurance industry – not exactly a positive when raising campaign money.

          For sure, though, Californians need better earthquake insurance than most can get now. This may not seem urgent right now, but after the Big One hits, the perspective will be very different.

    Email Thomas Elias at His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit

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