Insurers Expect Losses Will Top $100 Million

Damage from the ongoing riots may cost insurance companies more than $100 million, according to early estimates, but industry officials said it would be days before they would be able to get an accurate assessment.

“The situation is changing so rapidly that we just can’t get a handle on what our exposure is,” said Carol Willis, a vice president at Aim Insurance Co. in Anaheim.

The firm has nearly $4 million worth of policies in South Los Angeles, mainly with small businesses such as video and liquor stores--prime targets of looters. As of noon Thursday, six claims had been filed, totaling $200,000.

“But I’m sure that’s only the tip of the iceberg,” Willis said. “We tried to send our in-house adjusters to check on some claims, but they came back and said, ‘Excuse me, there’s sniper fire. We can’t go back in there.’ ”

Some insurance officials predicted that property/casualty rates would rise in the city and that people and businesses in riot-torn areas would have fewer choices for coverage in the future.

But Patricia Lombard, executive director of the Western Insurance Information Service, a trade association, said she doubted there would be a major effect on rates.

“We didn’t see big changes in fire rates after Santa Barbara or Glendale,” she said, referring to major fires in the summer of 1990.

Morris Davis Jr., owner of an Inglewood agency and former president of the Inner City Brokers and Agents Assn., predicted that the wave of destruction could surpass last fall’s Oakland hills fire, which caused an estimated $1.5 billion in damage, with 25 people killed and 3,000 homes burned.

He said the long-term damage to the inner city would be incalculable. “After the Watts riots, a lot of major carriers never came back into the area.”

Javier Rodriguez, owner of an agency in South Gate, agreed. “We were just starting to see the markets open up and be more competitive here,” he said. “Now we’re going back 30 years.”