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SOUTH : Merchants Blast Crusader's Action

April 11, 1993|ELSTON CARR

South Los Angeles business owners whose riot coverage was canceled by Crusader Insurance Co. condemned that action at a Board of Supervisors meeting last week.

"We feel terrible about it," Troy Jones, the co-owner of Astro mini-market near Manchester Avenue and Main Street, after the meeting. "They waited until the last minute to do it. Who's to say there's going to be another riot anyway? . . . They have no feeling for the people in this community. We stayed here during the riots to protect our business. It seems to me that they just redlined us."

After hearing from Astro market co-owner Diane Sims-Jones and liquor store owner Earl Ivie, the supervisors unanimously approved a motion calling on the County Insurance Commission and the county chief administrative officer to conduct an inquiry into the cancellation of riot insurance coverage of small businesses in South Los Angeles.

Supervisor Yvonne Brathwaite Burke introduced the measure after Crusader dropped fire and vandalism insurance coverage for about 1,200 small businesses in riot-affected areas.

Cary L. Cheldin, executive vice president of Crusader Insurance, said the cancellations were necessary to protect the company from bankruptcy in the event of more civil unrest. Crusader paid out $21 million in claims resulting from the riots.

The motion calls for a report with recommendations from the inquiry to be delivered to the Board of Supervisors by May 6.

Jones, who did not file a riot-related claim, will have his riot coverage dropped as of April 19. Although the business has received a quote from another insurance company offering the same coverage at a lower price, David J. Mc Culley, Jones' partner, said the new policy will not take effect until May.

"This has really caught us at a bad time," Mc Culley said.

Earl Ivie, the owner of Jolly Jug Liquors on Imperial Highway, said he is still seeking a new policy after his riot coverage was canceled by Crusader.

Victoria Pipkin, a spokeswoman for Burke, said the report could result in the county taking legal action on the insurance issue, including filing a civil rights suit.

Burke said the results of the inquiry will be forwarded to the congressional subcommittee on consumer credit and insurance in an effort to enact national legislation to combat insurance redlining.

"Historically, the state has not taken the lead in this issue," Pipkin said. "Supervisor (Kenneth) Hahn fought for years against insurance redlining. We think we have a better shot in Washington than in Sacramento."

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