Culver City can't find a company to insure its 58-year-old City Hall and Fire Station No. 1 against earthquakes because its insurers say the buildings will not survive a major earthquake.
The City Council learned last week that its main property insurer, Appalachian Insurance Co. of Providence, R.I., had declined to cover both buildings and nine other major city structures for earthquakes when it renewed its policy with the city Feb. 15. RLI Insurance Co. of Peoria, Ill., agreed to cover the others but not City Hall and Fire Station No. 1.
"If you can't (get coverage), you can't. It's just like liability insurance. It's just not available. The risk is back in the city's lap," said Michael Hodge, the city's risk assessment manager. "We're exploring every avenue to see if there is something else out there, if there is anything out there."
The refusal comes at a time when the insurance industry is increasingly unwilling to risk paying for earthquake damage, especially for buildings constructed before the state set earthquake building standards in 1933, according to John Beckendorf, Culver City's insurance agent.
Beckendorf said insurance companies are concerned by seismologists who predict that a major quake will hit Los Angeles area in the near future.
"There are very few carriers that will sell earthquake insurance," said Beckendorf, executive vice president of the Coast Insurance Agency in Los Angeles. "I don't see where (Culver City) could come up with a company to insure the two buildings. Even if they could, the price would be astronomical. Right now, the earthquake market in California is very tight, very difficult to work with."
In the meantime, Culver City has applied to join Independent Cities Risk Management Authority, a joint-powers organization that offers earthquake coverage, Hodge said.
City Hall and Fire Station No. 1, both on Culver Boulevard, were built of unreinforced brick and concrete in 1927. A survey last year found both buildings among 84 in Culver City that could collapse during a major earthquake.
City Hall houses the City Council chambers and administrative offices, including those of the city attorney, city clerk and fire chief.
Fire Station No. 1, next door, is Fire Department headquarters. It is one of the city's three fire stations. The city could apply for state or federal disaster relief funds in the event of a damaging quake. But federal funds would be available only if the federal government declared Culver City part of a broad disaster area. The funds would be in the form of low-interest loans the city would have to repay.
'Too Much Faith'
"There is feeling that if L. A. was hit by a major earthquake, the federal government would provide relief funds," said Beckendorf. "That's one reason why a lot of cities buy no earthquake insurance at all. But it may be putting too much faith in the federal government."
Last week, the City Council approved a new "all risk" policy from Appalachian to cover damage to city-owned buildings due to fire, vandalism and other damages, excluding catastrophic causes such as earthquakes and floods. The council also bought $5 million in earthquake insurance from RLI for nine major city buildings, including the police department and Veterans Memorial auditorium.
The two policies cost the city $108,000 a year, twice last year's premium because of increased property values, the city staff reported.
The nine buildings have replacement values totaling $13 million. The city decided on the RLI policy because officials believe a major quake in Culver City would not cause more than $5 million in damages, Beckendorf said.
City Hall is valued at $2.8 million and the fire station at $460,000, he said.
City Hall has been beset by violations of fire, ventilation and earthquake safety codes for years. Two years ago, the council decided against a major renovation in favor of building a new city hall. So far, however, the plan has been delayed by financing and site problems.
But Councilman Paul Netzel said that the loss of earthquake coverage could prompt the council to give construction of a new city hall higher priority.
"If the City Hall is unsafe and unworthy of coverage, it also says something to us about the course of action we should take (and may) make us move more expeditiously toward constructing a new city hall."
Netzel said delays have made it harder and more costly to find a building site because property values are rising. There are no plans to build a new main fire station, he said.