Merchants Face Eviction Over Lack of Insurance : Business: The city has given owners, who operate from a temporary tent-trailer complex, 30 days to buy costly liability protection. They say they can't afford the premiums.


Downtown merchants banished to a city-owned tent and trailer complex by the Northridge earthquake are facing another jolt: The city may kick them out if they don't buy costly liability insurance.

Some merchants say they can't afford the premiums, which are especially high because the shops are in relatively flimsy, temporary quarters.

"It's outrageous that the city is asking us for this," said Manuel Victoria, who has fixed shoes for 63 years in Fillmore and now works out of the city tent. "I can hardly keep the business going. How can I buy insurance?"

The City Council has given the merchants 30 days to provide proof of liability insurance worth $500,000. Without the coverage, the city is liable for any claims, City Manager Roy Payne said.

"If someone were to go into a building, trip over on a stair or piece of furniture, then the injured party could sue the city," Payne said. "And the city is in no condition to be able to afford that."

Although the city has insurance, its deductible is $25,000 for each claim, he said.

When the merchants moved into the temporary compound shortly after the January, 1994, temblor, the city wanted each of them to purchase $1 million worth of insurance, Payne said.

About a month ago, the city manager learned that only two merchants had insurance.

The city immediately sent the merchants a letter reminding them of the requirement. Last week, the City Council voted unanimously to terminate the contracts of merchants who aren't insured within 30 days.

To make it easier for the shopkeepers, the council agreed to decrease the amount of insurance from $1 million to $500,000, Payne said.

Maria Gonzalez, who operates a clothing and shoe store out of the city tent, said she knew about the insurance but was hit too hard by the earthquake to afford it.

"I have no problems with the requirement, but I don't know where to find the money to buy the insurance," Gonzalez said, adding that it would cost her at least $200 a month in premiums.

Gonzalez added that she has yet to find an insurance company that will agree to cover her.

Paul Maher, a Fillmore insurance agent, said he is having a hard time finding coverage for six merchants who recently requested his help.

"It's tough because the majority of insurance companies don't like to insure people who operate out of temporary facilities," Maher said. "It's just riskier."


Some merchants also were outraged at the city for no longer providing a security guard to patrol the tent and trailer.

The city hired the patrol service following the quake out of concern over vandalism and theft in the pulverized downtown area.

But about a month ago, the city terminated the service because it had become too costly--$42,900 a year--and vandalism is no longer considered a threat, Payne said.

"It's no longer necessary," he said. "People are now used to the tent and the trailer, and it's no longer an attraction to out-of-town people."

The merchants pay the city 50 cents a month for each square foot they occupy. They are expected to remain in the temporary tent and trailer until the new City Hall, which is being built downtown, is complete.

The new City Hall was subsidized by a $1.3-million federal grant awarded to the city after the earthquake. One of the grant's requirements is that the city allow the merchants to use the building for a year or until they find other places to do business.

But for merchants such as Victoria, it's very unlikely the City Hall will be an option. Victoria said he may shut down before construction starts in July.

"I only make $7,000 a year in my business, and if it comes to either buy the insurance or be evicted, I may quit," he said.

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