L.A. Still Picking Up The Pieces After Quake

Two years of insurance money and sweat is paying off

TWO years after the second costliest disaster in US history - the 6.7-magnitude quake that hit on Jan. 17, 1994 - Los Angeles has repaired about half of the temblor's damage.

With a few exceptions, the scarred suburb-scape of collapsed apartment buildings, malls, and retail strips appears back to its pre-earthquake form - several major stretches even look better than before. The infusion of billions in insurance monies and communitywide sweat equity have nudged the region's economy out of years of recession.

But at the same time, behind the new look and feel of normalcy, the wheels of rehabilitation are turning slowly on a number of fronts. Many retail businesses are still struggling while others have left the area for good. Because of the sheer quantity of claims and paperwork - the quake caused $25 billion in damage - many homeowners have only just begun to tackle needed repairs.

''Though the community for all intents and purposes has come back, structurally we have a long way to go,'' says Mike Feuer, the new City Councilman representing Sherman Oaks, one of the areas hardest hit by the earthquake.

He ticks off a laundry list of hurdles such as the recent loss of rehabilitation funding for 3,673 housing units in his district. Other funding sources for a process - known as retrofitting - that protects houses from future earthquakes has been stalled, he says.

There have also been scandal-size abuses by contractors estimating repair damage. Some contractors have been accused of ''fixing'' homes that didn't need it.

Half repairs down, half to go

Over the past 24 months, repairs costing $1.25 billion have been performed on the 92,000 buildings and 20,000 housing units that city officials vacated after the quake. But some 40 percent of repair money, or $950 million, is still expected to be spent on non-single-home dwellings, according to Nick Della Quadri at the Los Angeles Department of Building and Safety.

About 98 percent of $11.4 billion in insured losses has been paid out, according to Property Claims Services, a group that tracks the insurance industry. But that figure belies the amount of damage to the area, as only 45 percent of homeowners eligible for earthquake insurance were covered, they say. A large, but unknown percentage of homeowners is still in the beginning stages of repair using personal and insurance funds.

High marks for FEMA

Generally, high marks have been given to the Federal Emergency Management Agency (FEMA) and the Small Business Association (SBA) for the speed and ease with which they have aided quake victims. FEMA has doled out $3.1 billion to 681,000 individuals and businesses. SBA has approved 124,044 low-interest disaster loans worth about $4.3 billion.

''We have learned so much from the string of disasters that has hit California,'' says Eliza Chan, San Francisco spokeswoman for FEMA. ''California is now the best equipped state of all to deal with mass calamity.''

But Councilman Feuer and others say the quake underlined weaknesses in the private insurance industry, which is trying to carve out new models of coverage for the future. The city is also in the process of drafting new building codes, retrofitting requirements, and emergency preparedness guidelines that recommend everything from strapping down water heaters to storing necessary amounts of drinking water and food.

On the insurance front, crisis has ensued because California State law mandates that companies who offer homeowner's insurance must also offer earthquake coverage. Faced with near bankruptcy by the quake, several companies have tried to get out of offering homeowner's insurance altogether. Others have increased premiums, raising the average cost of earthquake coverage to double its pre-earthquake cost.

''We have had what amounts to a crisis in the insurance industry,'' notes Candy Miller, spokeswoman for State Insurance Commissioner Chuck Quackenbush. ''No one anticipated the kind and amount of damage that could occur when a quake hit a highly populated urban area.''

A large part of the problem is trying to establish fair premiums based on the predictability of earthquakes. Insurance officials say earthquakes are just not as predictable as hurricanes and tornadoes.

To address the problem, State Insurance Commissioner Mr. Quackenbush has extended the state's FAIR plan (Fair Access to Insurance Requirements) to offer disaster-related fire coverage to homeowners.

But because such a plan puts insurance companies at enough risk that many are fleeing the state, Quackenbush proposed - and is expected next month to win final approval of - the California Earthquake Authority, a publically managed, privately funded plan to grant bare-bones earthquake coverage to anyone not covered privately.

''This won't be the Cadillac of insurance policies, but it will be enough to make sure people can get a roof back over their head,'' says Ms. Miller. A bill now in Congress is trying to make a similar plan available nationwide.

Remaining enigmas

But if much of the worst of Los Angeles's devastating ''Quake of '94'' is behind the city, stories of Kafkaesque confusion are still easy to find.

''I can't find who owns this abandoned condo building to ask what's going to happen with it,'' says a Sherman Oaks homeowner. Complaining that stripped walls and abandoned scaffolding are an eyesore and could hurt her chances of selling her home, she says: ''Who knows when someone will do something about this.''

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