Insurance disputes over the 1906 San Francisco earthquake and fire

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In an article published in the scholarly journal Western Legal History, Robert James, co-leader of Pillsbury’s energy team, shakes up accepted wisdom and puts to the torch a few cherished myths about the aftermath of the 1906 San Francisco earthquake and fire. His research into fire insurance coverage disputes after the disaster sheds new light on how residents coped with massive damage.

James, a California native born close to the San Andreas Fault, has long had an interest in the San Francisco catastrophe. In one book after another, he kept encountering the narrative that the press, politicians and public put so much pressure on insurers that they eventually caved. One history claimed that ‘a number of disputed cases went to court, and in every case the insurer lost’. Once James began to dig around in reported cases from the era, he could tell things were not so simple.

His article, ‘Six Bits or Bust: Insurance Litigation over the 1906 San Francisco Earthquake and Fire’, puts into context the good-guys/bad-guys narrative handed down over the years. While there were underwriters that chose to pay all policyholders in full ‘irrespective of the terms of their policies’, as Cuthbert Heath of Lloyd’s decreed, there were also European insurers who became infamous for offering 75 per cent or ‘six-bit’ compromises or denying coverage…

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