Seven hours after an earthquake sent the ceiling crashing down on her, breaking her foot, Maria Cohen was still at her job Monday, connecting doctors with patients at an answering service in the San Fernando Valley.
“The doctors are hysterical. The patients are hysterical. But I have to stay calm,” said Cohen, pulling plugs from a huge Lily Tomlin-style switchboard amid piles of rubble in the storefront operation on Ventura Boulevard.
The earthquake victims Cohen was speaking with Monday may be among the last people she and her fellow workers will be able to help.
Like a surprising majority of home and business owners in quake-prone Los Angeles, Cohen’s employer does not have special earthquake insurance and could be forced out of business.
Despite the region’s shaky history and pleas from officials, legions of fatalistic Southern Californians dismiss the special safety net as not worth the cost.
The decision to skip the insurance may leave many either homeless or facing steep repair bills in the months ahead. Others will be haggling with insurance companies long after the rubble is swept up, surprised that their standard homeowner policies cover fire damage but not a total collapse or structural damage caused by a quake.
Even those with quake policies typically must pay the first 5 or 10 percent of damage repair themselves. Thus the owners of an insured $300,000 home, not unusual here, would have to pay up to $30,000 before collecting a dime on their policy.
Few in the San Francisco area had earthquake insurance when a severe quake struck there in 1989. That quake caused an estimated $7 billion in damage, but insurance companies covered only about $960 million of it.
Officials say only 25 percent of California homeowners carry quake insurance. In areas especially prone to earthquakes, the figure may rise only to 40 percent. Few small business owners carry policies, either.
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“Most people are gamblers,” California Insurance Commissioner John Garamendi said Monday. “Many of them took a gamble and lost.”
Emotions run high over the issue. For example, in one Studio City condominium complex, a heated debate among condo association members ended last year with a tie vote and a final decision not to buy a policy.
Some argued that heavy damage would be a financial disaster with or without insurance. Others insisted that less than $300 a year per unit was a small price to pay to prevent what could be bankruptcy for some people.
Those same arguments were heard among the rubble Monday.
“The reality is that earthquake insurance is too expensive unless you have millions and millions of dollars,” said Cathee Weiss, a documentary filmmaker who had a policy for only the personal items in her damaged Sherman Oaks townhouse. “It’s a really hard call, but let me tell you, it’s not about insurance. It’s about whether you’re going to live.”
Others who skip earthquake insurance count on the federal government to bail them out in case of a catastrophic quake.
Alan Rudolph, 41, a clinical psychologist, feels fortunate that he disagrees with that philosophy. He purchased a policy for his $350,000 home in the San Fernando Valley, which now will pay for his damaged chimney and water heater.
“I lost a house to an earthquake in 1971, so I know that the insurance never costs too much,” Rudolph said.
Dick Donegan, underwriting manager for Allstate Insurance in the Los Angeles region, said a typical Allstate policy costs from 70 cents per $1,000 of coverage for renters up to $6 per $1,000 for the most susceptible homes.
Cohen’s employer, Cliff Lazar, the owner of the Valley Doctor Answering Service, said he thought that was too expensive.
Now, searching for cracks in the walls of the office he rents, he was wondering whether he could afford to move his entire operation to a new place if the building is condemned.
“I didn’t get a policy on my apartment complex, either. Obviously, now I wish I had,” said Lazar, who estimated the value of his answering service at $200,000. “It just didn’t seem worth it. What’s an earthquake? It comes every 20 years.”