Sizing Up Costs, How They’ll Be Paid

The insurance agents came back to the Doyles’ house last week.

The last time they were there was June 28, the day the Sierra Madre earthquake shook the western San Gabriel Valley. Using computer lists, the agents had shown up hours after the quake to check on their clients, including the Doyles in their rambling, turn-of-the-century house on Baldwin Avenue.

Now, they had come to tell the Doyles how much of their loss would be covered.

For 90 minutes Tuesday, the Doyles and three insurance agents, sitting in straight-backed, cane-bottom chairs, gathered around the antique oak table in the dining room. This was one of several meetings last week in which the Doyles discovered how long the repairs might take, when they might begin and how much they will cost.

In the room where earthquake-caused cracks snake across the walls, the Doyles and the agents spread out contractors’ estimates and binders of insurance documents with photographs of fissures.

Everyone, it was clear, knew the meeting’s importance to the Doyles in rebuilding their disrupted home life and the house.

With five people, the conversation ricocheted.

Bart Doyle, 41, general counsel for the Building Industry Assn. of Southern California, had questions. His 43-year-old wife, Sharon, a free-lance TV writer, did too. Apprehension and politeness filled the room. Sharon raised the issue of asbestos. A laboratory report on the table indicated that the wall plaster contained no asbestos. But the heating ducts in the basement--dislodged by the temblor--had asbestos and would, by law, have to be removed.

The asbestos removal item, the agents said, is an “open one.” Not all of the bids included the removal, said the agents from the Interinsurance Exchange of the Automobile Club of Southern California, based in West Covina. But they added that, regardless, the problem will be paid for as part of the claim.

Through open windows came the sounds of construction workers repairing the earthquake-damaged house next door. A portable concrete mixer droned. Hammers did their work. An electric saw whined, and men moved brick and stone around a scaffolding where a fireplace was rising anew.

One of the Doyle boys, Nick, briefly eavesdropped under a window. But he quickly left when the talk turned to the South Coast Air Quality Management District’s rules on asbestos removal.

Three contractors who inspected the house in the last month had submitted bids. One from a Whittier company didn’t show a bottom line. Another, from a Pomona contractor, estimated the job at $52,966.33. The third, from a Glendora firm, said it would be $58,892.67.

The bids included repairing the cracked foundation, replastering or drywalling the interior, dismantling the chimney and painting the trim and wainscoting.

Those figures, agent Steven J. Schmid said, include 10% overhead and 10% profit, the maximum that state law allows contractors on a job such as this.

The estimates, Sharon said, were lower than the $65,000 estimate by the inspector from the Small Business Administration. She asked why.

Bart answered: “He spent 10 minutes. It’s just a base figure.”

“We take a little bit more time,” Schmid said. But then he said what would reassure the Doyles later that day. “This gives us an idea of how much damage there is. This is a starting point.”

The Doyles could have some flexibility to work with the contractor, the agents said. If the Doyles want to replace their damaged chimney--whose dislodged granite stones were stacked on the front porch--with a slightly less expensive version, then the money saved could be a credit. This, the agents said, could be applied elsewhere for improvements on the house.

“The important thing to remember is this is an ongoing process,” said Al Fitzgerald, the manager of his office’s claims division. “We don’t know the extent of the whole damage.”

Bart asked who would oversee the work.

“The contractor you select, he is the hub,” Schmid said, letting them know they could choose among the three who bid or solicit other bids. But the insurance company, he said, will coordinate the work.

Bart said, “It’s kind of like you’re going to manage everything.”

“We have the checkbook,” agent Natricia L. Bradford said.

But how does the deductible work? Bart asked. He wanted to know because they expect to get a disaster assistance loan from the Small Business Administration in the next two weeks. The SBA loan will cover the cost of the $19,600 insurance deductible, which is 10% of the $196,000 insurance the Doyles had on the house.

Bart wanted to know when he would have to pay this money to the contractor and whether it needed to be in a lump sum.

That’s between the Doyles and the contractor they select, the agents said, adding that the deductible is paid first before the insurance company begins its payments. But the agents said most contractors are willing to work out a payment schedule and won’t require the Doyles to pay the entire amount of the SBA loan at once.

Once the contractor begins, Schmid said, the insurance company will conduct spot inspections, unannounced except to the Doyles.

What about the city building inspector?

“He’s going to have a major influence,” Schmid said.

Bart indirectly addressed the issue of whether the insurance company would pay for the family to move and for packing and relocating furniture.

“This room is going to come apart,” Bart said. “We’re not exactly excited about the idea of being in a motel with three kids. “

“Whatever is going to accommodate you folks and your family,” said Schmid, who assured them that there would be no problem if they wanted to stay in a motel.

As the meeting continued, there were interruptions, on the phone and at the door, from children and grown-ups. Once, a man from the Los Angeles Times came to collect the delinquent bill for a subscription. “We lost the whole month of July. It’s a black hole,” Bart said later, explaining that bills were lost in the turmoil after the quake.

To his surprise, Bart would later say, there was no hard negotiating during the meeting. And Sharon said after the agents left, “There were a lot of uncertainties that were dispelled, despite a lot of dancing around that was done.”

Bart concluded that the insurance package had been a good investment. During the last five years, the Doyles paid about $425 a year for earthquake coverage. Now it was going to return in the tens of thousands of dollars.

To Sharon, the insurance money means she’ll be able to make over the house years before she had dreamed that it would be possible.

She looked around at the burgundy walls of the living room. “Now all of the sudden we’re going to have the opportunity to make it . . . “ she paused and then said: “YELLOW.”

“The house isn’t going to rattle as much,” Bart said.

The next day, the Doyles met with one of the contractors, who said that he could start within two weeks of being notified and that the work would take 10 to 12 weeks.

Later that night, with images of plaster dust flying throughout the house, Bart and Sharon told their three children that the work will soon start, probably about the time they go back to school in September.

“The house is going to be a mess,” Sharon told the children, “and it’s going to be a mess until Christmas.”

The Cost of Rebuilding Pieces of the Doyles’ earthquake insurance puzzle.

Amount of earthquake insurance coverage on structure: $196,000, (pays for complete renovation, less $19,600 deductible.)

Repair estimate totals: $53,000 to $65,000

Removal and replacement of two-story chimney: $6,200 to $15,000

Small Business Administration disaster assistance loan: $23,520. (Covers insurance deductible and includes money for quake prevention measures such as anchoring of foundation.)

SBA payment schedule: $250 monthly at 4% for eight years.