In 1998, Los Angeles has become immensely crime-ridden and decadent, ultimately being directly governed and patrolled by the recently created United States Police Force. Two years later, on August 23, 2000, a massive earthquake strikes Los Angeles, the San Fernando Valley floods, and the Los Angeles area turns into an island from Malibu to Anaheim. An American presidential candidate who is also an outspoken theocrat has been saying that L.A. is sinful and has been punished by God.
When he is elected President for life, he declares that anyone not conforming to the new "Moral America" laws he creates, which ban such things as tobacco, alcoholic beverages, recreational drugs, red meat, firearms, profanity, atheism, freedom of religion and extra-marital sex, will be stripped of their citizenship and deported to Los Angeles Island unless they repent and choose death by electrocution. A containment wall is built around the island, armed guards and watchtowers are posted, and those sent to the island are exiled permanently.
In 2013, Cuervo Jones, a Shining Path Peruvian Revolutionary, seduces the President's daughter, Utopia, via a holographic system and brainwashes her into stealing her father's remote control to the "Sword of Damocles" super weaponâa series of satellites capable of rendering all electronic devices anywhere on the planet useless. The President intends to use the system to destroy America's enemies' ability to function and eventually dominate the world. While traveling aboard Air Force Three, Utopia leaves the plane in an escape pod and lands on L.A. Island to join with Cuervo.
With the satellites under his control, Cuervo promises to take back America with the assistance of an allied invasion force of third world nations that are standing by to attack. Cuervo claims that if the President tries to stop him, he will "pull the plug" on the country and black out the capital. Cuervo also knows the secret world code that can knock out power for the entire planet.
Snake Plissken is captured for another series of crimes and is scheduled to be exiled to Los Angeles Island. Upon his arrival for deportation, Snake meets the President and is offered the mission of retrieving the weapon. The President says he will give him a full pardon if he is successful. The President indicates he does not care if Utopia is returned or not, declaring her a traitor. To ensure his compliance, Snake is infected with the man-made Plutoxin 7 virus that will kill him within ten hours. If he completes the mission, Snake will be cured.
Snake is given an assault rifle, a personal holographic projector, a thermal-camouflage overcoat, and a countdown clock for how long he has to live. Los Angeles is in ruins and a hotbed of crime. Snake sneaks into the city with a mini submarine that he loses when the platform it landed on crumbles, causing the sub to sink. Making his way across the island, Snake meets "Map to the Stars" Eddie, a swindler who sells interactive tours of L.A.
Snake defeats Cuervo at his staging area of The Happy Kingdom By The Sea in Anaheim and takes the remote control. Snake leaves the island with Utopia and some other Cuervo resistors in a helicopter. Cuervo shoots at it with a rocket launcher just before Eddie kills him, but seeing the incoming rocket, Eddie leaps off the chopper, landing on an awning. The rocket hits the chopper and kills those in the back of the chopper but also causes a fire; Snake and Utopia bail out before it crashes. When the President's men reach the crash site, Snake intentionally hands off the wrong remote to the President while Utopia is taken to the electric chair despite her pleas for forgiveness. The Plutoxin 7 virus is revealed to be nothing more than a fast, hard-hitting case of the flu. The President tries using the satellites to stop a Cuban invasion force threatening Florida. Activating the remote, the President hears only Eddie's "Map to the Stars" intro over I Love L.A..
The President orders Snake's execution but Snake previously activated his hologram projector and the Snake that gets shot is an illusion. Snake activates the real control device, entering the world code, against pleas to stop. At the deportation center, Utopia expresses her surprise that Snake shut down the Earth and thus saved her. In the final scene Snake lights a cigarette and blows out the match used to light it, upon which he utters "Welcome to the human race," and the film ends.

Question: Why does L.A. turn into an island?
Answer: Because of an earthquake.
Alternative answer: as a result of the earthquake