Storm-Surge Damage May Not Be Covered by Some Insurance
2:30 p.m., Oct. 30, 2012 — As storm-battered homeowners, business owners, and government officials survey Sandy’s damage, the question for many is what the repair price tag will be. The storm’s assault may cause as much as $ 20 billion in losses, but less than half of that is likely insured. Some damage, such as infrastructure repairs, will be covered by the government. But some losses simply won’t be covered, leaving businesses and homeowners holding the bag.
Regular homeowners’ and renters’ policies don’t cover flood losses. For residences, people must buy extra flood-insurance coverage, which is typically sold by agents as part of the government’s National Flood Insurance Program. As many will recall, there was a big debate during and after Hurricane Katrina over whether damage was caused by flooding or wind, with wind damage covered by standard policies. Bob Hartwig, president of the Insurance Information Institute, a trade group, says “that issue has been settled. There is no question that a storm surge is a form of flooding.”
That means that homeowners affected by Sandy’s surges and who lack flood insurance are out of luck. Hartwig says that in low lying areas—such as parts of Brooklyn and Queens—“the penetration rates for flood coverage are very high.” But not everyone has this coverage. Hartwig points out that even in New Orleans, a city that set largely below sea level, one in five homeowners didn’t have flood coverage before Hurricane Katrina struck. He says the “silver lining” from Hurricane Irene last year is that more people in the Northeast bought flood insurance after seeing the damage that storms are capable of wreaking.
Businesses may be better off. Most commercial insurance policies do include protection against floods, but often the policies have a specific “sublimit” that caps the flood coverage, says Linda Kornfeld, an attorney at Jenner & Block who represents companies in insurance claims. That’s true for policies that covers property losses, as well as the costs for business interruption due to an event such as Sandy. While storm-surge damage may be a form of flooding in residential policies, its nature is less clear for commercial policies, which tend to be more complex, Kornfeld says. “I wouldn’t accept as a general proposition it’s covered or not without reading the policy and without reading the case law in the state where the policy is,” says Kornfeld.”
A lot of people may soon became intimate with the fine print in their policies. While it’s too early to know how many will file insurance claims, yesterday CoreLogic estimated that just in the top 25 at-risk zip codes of New York and New Jersey, about 62,000 properties were in danger of sustaining property damage.
—Karen Weise
Photograph by J. Scott Applewhite/APWorkers haul sandbags to protect The Pavillion at the Old Post Office in Washington, D.C. on Oct. 29, 2012
Under Financial Duress, Post Office Delivers
2:15 p.m., Oct. 30, 2012 — The federal government was shut down. Stock trading came to a halt. Most businesses up and down the East Coast were closed and people were hunkered up at home, hoping for the best, when lo and behold—the mail arrived.
Yes, even as Hurricane Sandy came crashing down on the Mid-Atlantic, the U.S. Postal Service managed to deliver to some residents of Washington D.C., Maryland, and Virginia. In an email, USPS spokesman George Maffett says that letter carriers in a delivery area stretching from Atlanta to Baltimore hit all but 97,500 of the 7.7 million addresses they’d visit on a normal day. Only Ocean City, whose residents were evacuated, didn’t get their mail. Service stopped in some parts of New York City, too. Maffett explains that USPS opened emergency operations centers to watch the weather and direct postal workers as they were out on deliveries.
Could the postal service’s own battered image have something to do with that impressive effort Monday?
Maffett’s response: “In 2011, Oxford Strategic Consulting ranked the U.S. Postal Service number one in overall service performance of the posts in the top 20 wealthiest nations in the world.”
Yet the agency is on the brink of financial disaster, with Congress fighting over how to save it. In late September the self-funded agency defaulted on a $ 5.5 billion payment owed to the U.S. Treasury, its second default in only two months’ time. The payment was required to fund future retirees’ health benefits. USPS officials have blamed that obligation as a big source of the agency’s woes—along with years of declines in the amount of mail people are sending. That’s why the agency’s exceptional attention to customer service isn’t likely to make much of a difference. Most people were likely so consumed with other media that they probably didn’t even notice their mailman’s valiant effort.
– Elizabeth Dwoskin
Some Bridges Reopen, But MTA Has No Timetable
1:51 p.m., Oct. 30, 2012 — Even parts of New York that haven’t lost power remain paralyzed by Hurricane Sandy. The Metropolitan Transportation Authority is unsure as to when subway services will resume—or what parts can be quickly repaired. The Brooklyn, Manhattan, and Williamsburg bridges that connect Manhattan to Brooklyn have reportedly reopened, but for a city whose residents rely so heavily on public transportation, even a partly inoperable subway system could have far-reaching economic impact in the coming days and weeks.
“Those portions of the system that can be up and running, I want them up and running as quickly as possible,” MTA Chairman Joseph Lhota said in an interview on Tuesday with WNYC radio. Lhota stressed that no timetable had yet been set, so any estimate would be nothing more than a “wild guess.”
– Claire Suddath
1:39 p.m., Oct. 30, 2012 — New York and New Jersey residents are now eligible for disaster help and resources. Go to DisasterAssistance.gov for more information.
Mayor Bloomberg: ‘People Just Don’t Understand How Strong Nature Is’
12:38 p.m., Oct. 30, 2012 — Mayor Michael Bloomberg spoke to New Yorkers Tuesday morning, announcing that city schools would be closed Wednesday and saying it might take up to five days to get subways running. Runways at the city’s airports are flooded, many in the region are without power, and 6,100 residents are staying in emergency shelters. “We expected an unprecedented storm,” the mayor said. “That’s what we got.”
As the mayor’s star sign-language interpreter, Lydia Callis, translated, the mayor provided additional updates:
—Public transportation is closed until further notice, with no timeline set for its restoration. Limited bus service may be restored, “perhaps this afternoon.”
—Roads may be clear and free of water as soon as Wednesday.
—A few hospitals are closed, including New York Downtown Hospital, the only hospital in lower Manhattan. NYU Langone and Coney Island hospitals have been evacuated. Bellevue Hospital Center is running on backup power.
—The collapsing crane on West 57th Street is currently stable but cannot be fully secured until the winds die down.
—The 311 emergency lines are currently experiencing long wait times. The 911 lines had delays up to 5 minutes at some points but is now operating more smoothly.
—There have been more than 4,000 tree-service requests. The mayor advises people to continue to stay out of parks. “I think people don’t understand just how strong nature is,” Bloomberg said.
—Emily Biuso
Artists Find Inspiration in Hurricane’s Fury
12:31 p.m., Oct. 30, 2012 — As most of the East Coast hid from Hurricane Sandy, Gil Corral and his wife went out onto Fortune’s Rocks Beach in Biddeford Pool, Maine, to take this photo. Corral, an artist, has photographed the character, which he calls “El Chicharron” (or “pork rind”), in snowstorms and other severe weather. “It does definitely inspire creative thought, these events,” he says. “I’m just trying to bring some relief. Everyone was freaking out.”
Corral did the shoot Sunday evening, before the hurricane made landfall. “We’re in Maine, so Sandy didn’t really hit directly,” he says, “but the seas were stormy, winds were high, lots of rain.” Corral is using the photo to make refrigerator magnets, which he’s already selling on Etsy.com for $ 5 each.
In Baltimore, artist Jamie Shelman has produced this Sandy-inspired ink drawing. “In this instance, I found it funny that society in general always has the same response to the fears related to a weather event,” she says in an e-mail. “My drawing is a comical response to those societal responses ( i.e., empty the shelves of toilet paper, white bread, and milk!) And also lashing yourself to what you perceive as an immovable object—in this case a tree—is a comical and not good idea.” Shelman says she’ll make 40 prints of the drawing.
John Ballou, an artist in Rochester, N.Y., says, “Sometimes the best way to break through the horrific loss is with a little bit of humor after the waters have receded.” He’s made 20 rubber-stamp cards that read: “Frankenstorm Survivor.”
—Venessa Wong
New York Airports Shuttered
11:30 a.m., Oct. 30, 2012 — Air travelers looking to fly to or from the U.S. Northeast are largely out of luck today, and Wednesday may not be much better. Federal authorities and the Port Authority of New York and New Jersey closed New York’s three main airports, John F. Kennedy International, Newark Liberty, and LaGuardia, on Monday over concerns about flooding caused by Hurricane Sandy. It’s not clear yet when traffic may resume. Here’s an FAA map of the airports’ current status; a black dot means an airport is closed.
Since Sandy began its northward march from the Caribbean, airlines have scrubbed more than 16,200 flights, according to flight tracker FlightStats. More are likely as aircraft will need to be repositioned.
—Justin Bachman
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