The insurance industry will soon be shelling out big payments to cover the storm’s massive damage. And it says the U.S. is uniquely positioned to suffer from climate change, Matthew Zeitlin reports.
In times of crisis, few people instantly think in terms of dollars and cents. But before the floodwaters have subsided, the insurance industry has already hastened to calculate the damage from Sandy.
A huge tree split apart and fell over the front yard and fence of a home in Sea Cliff, N.Y., on Tuesday in the aftermath of Hurricane Sandy. (Kathy Kmonicek / AP Photo)
The most widely cited economic and insured loss projections came from Eqecat, which does risk modeling for insurance companies. On Monday, it projected insured losses—meaning the amount insurance companies would have to pay out—due to Hurricane Sandy of $5 billion to $10 billion. Eqecat estimated the total effect on U.S. economic activity would be between $10 billion and $20 billion. Bill Keogh, the president of Eqecat, said that the damage done by Sandy, although clearly extensive, is well within the range of the models Eqecat builds.
He pointed out that New York City, which does not get hit with severe storms with anywhere near the frequency of, say, Florida, has seen similar storm surges before: Hurricane Donna in 1960 and Hurricane Agnes in 1972. Also, he noted, the economic loss from this hurricane is magnified by the fact that New York City is a wealthy area. Lots of people leave here and they own lots of valuable property. The rising cost of hurricanes in insured losses is, to a large degree, a function of rising home values.
But the insured losses for insurance companies may not reflect the sum total of economic damage suffered by the region. Hurricanes can cause damage to property in a few ways: storm surges and flooding, wind, and inland flooding. Although there has certainly been substantial wind damage, like trees falling onto homes, the truly catastrophic damage up and down the coast of Long Island and New Jersey largely comes from the storm surge flooding.
Wind damage is covered by standard homeowner’s insurance. But water damage from flooding is provided through the federally subsidized National Flood Insurance Program, which covers 5.6 million individuals and business. There is a small “excess flood insurance” market, but the overall flood-insurance market is dominated by the feds. Which means private insurance companies aren’t on the hook for losses tied to coastal flooding.
The storm also did a number on New York City’s transportation system. Keogh said that the city’s infrastructure isn’t designed to deal with that much salt-water sloshing through the city and, especially, its subway tunnels. That will impose direct costs on the city, as crews work to pump water out of tunnels, restore electricity, and repair storm damage.
But it will also impose massive indirect costs. With the subway and commuter rail shuttered, commerce in Manhattan and other parts of the city will fall dramatically, as shoppers and workers simply can’t get very far from where they live. (Your correspondent is working from his apartment in Brooklyn right now as The Daily Beast’s Chelsea offices are closed). So, a business owner who suffered relatively little wind or water damage may nonetheless suffer a dramatic decline in income for the next week. “They have to look very closely at their policy” to see exactly what damage they can claim, said Keogh. New York City’s economy is also propelled in large part by tourism. In 2011, some 50 million tourists visited the U.S. But with air and train routes shut down for the next week, hotels, restaurants, and shops that cater to tourists will likely see lower revenues.
FEMA has money now, but if the hardest-hit states need more funds after their damage assessments, will congressional Republicans fight against disaster relief, as they did in the wake of Hurricane Irene? Eleanor Clift reports.
If you expect Congress to take some action in the wake of Hurricane Sandy, guess again.
A Democratic congressional aide says it’s unlikely the Hill will do so in the lame-duck session on one of the most damaging storms in modern history. Congress funded FEMA earlier in the year as part of a supplemental money bill, so the agency should have enough in the bank to deal with Sandy—for now.
The caveat, of course, is that damage assessments are just getting under way in the hardest-hit states, and more funds may be needed.
The congressional aide dismissed talk about the politics of disaster relief. “The last thing that Americans who suffered this devastation and are trying to rebuild their lives want to see is a political fight,” he said. “If more funds are needed, Congress should come together and act in a bipartisan fashion.”
Republicans opposed disaster relief that wasn’t paid for after Hurricane Irene battered much of the East Coast last year. Democrats hammered them for supporting tax cuts for the wealthy without such “pay-fors.” Recognizing they were losing the public-relations wars, Republicans backed off.
If more money is needed for rebuilding efforts after Sandy, Republicans will have to decide whether this is a fight they want to wage again. A Republican leadership aide, asked if there was any discussion of a supplemental funding bill, said simply: “Not yet.”
Famous landmarks can't be replaced.
New Jersey Gov. Chris Christie got a little nostalgic at a Tuesday press conference describing the devastation that took place along the Garden State’s coast. He talked about the roller coaster and log flume he used to ride as a child vacationing at the shore and the piers and boardwalks where he took his children. “For those of us who are my age, it will not be the same. Many of the iconic things are gone, washed into the ocean,” Christie said. Taking stock of the disaster, Christie said he was grateful that the loss of life had been minimized—the latest count stands at six dead—and roughly 1,000 had been rescued from the flooding.
Because of flooding.
New York City transit authorities cautioned on Tuesday that the city’s subways may be closed for several days thanks to Hurricane Sandy. Several tunnels had flooded, switches had been damaged, and the South Ferry station was “track to ceiling” with water, according to officials. “The New York City subway system is 108 years old,” said Joseph Lhota, the chairman of the Metropolitan Transportation Authority. “It has never faced a disaster as devastating as what we experienced last night.” There is one silver lining, however. It doesn’t appear that Hurricane Sandy caused any permanent damage to the system.
‘I’ve come back to save my people from the storm!’ said native son Jimmy Kimmel—who transplanted his L.A. show to the storm-ravaged New York City borough. Eliza Shapiro was in the sold-out audience.
Jimmy Kimmel may have picked the wrong week to move his late-night talk show from sunny Los Angeles to stormy New York City, but his Tuesday-night taping at the Brooklyn Academy of Music was a distinctly local affair—or at least tried hard to be.
This July 25 photo released by ABC shows Jimmy Kimmel hosting his late-night show "Jimmy Kimmel Live!" in the Hollywood section of Los Angeles. (Richard Cartwright / AP Photo)
Jimmy Kimmel Live! packed up and headed east last week, when the Frankenstorm reports were just beginning, as part of a week of shows billed as Kimmel’s homecoming to his native Brooklyn.
The show got a Kings County–appropriate makeover: the Ms in Jimmy Kimmel were turned into the arches of the Brooklyn Bridge, his desk was transformed into a subway stop, and the house band played jazzed-up renditions of the Ramones’ “Rockaway Beach” and Notorious B.I.G.’s Brooklyn anthem “Juicy.”
Hurricane Sandy dominated the show, which had been canceled the previous night due to extreme weather, from start to finish. Kimmel’s producers thanked the live audience at BAM’s Harvey Theater profusely for attending despite the crippled city outside—subways and some tunnels remained closed Tuesday night, and power was out in all of downtown Manhattan. “We know what happened in the last 24 hours,” a producer told the sold-out crowd. “It was ridiculous.”
“I was born in Bay Ridge, grew up in Mill Basin, and I’ve come back to save my people from the storm,” Kimmel told the crowd, to thunderous applause. “More than 8 million people lost power last night,” he said, “which means that no one is watching this right now.”
New York City Mayor Michael Bloomberg got a shout-out from Kimmel during his monologue—and a riotous round of applause from the audience. “It’s hard to be boring in the middle of a disaster,” Kimmel said of Bloomberg, “but he managed to do it.”
Kimmel’s guests, Howard Stern and Tracy Morgan, eagerly shared their Sandy stories. Morgan reassured the crowd that his exotic fish were safe after his private generator switched on when the power went out. “This never happens in New York,” Morgan yelled to the crowd. “This storm has ‘Republicans’ written all over it!”
Five feet of seawater tore through the streets of the low-lying Brooklyn neighborhood Monday night. While the owner of one flooded bar is pledging to stay open, a teary billiards-hall proprietor says she’s ruined. Eliza Shapiro reports.
“That’s it, I’m done,” said Irene Irizarry, wiping away tears as she surveyed the damage to Bomba Billiards, the bar she owns in Red Hook, Brooklyn, which was ravaged by Hurricane Sandy on Monday night. “Forget it,” she said. “Everything is done.”
A police car drives by a downed tree Tuesday in the Red Hook section of Brooklyn after Hurricane Sandy caused extensive damage. (Spencer Platt / Getty Images)
Red Hook, a low-lying area on the water that was in a Zone A mandatory evacuation region, was among the hardest-hit neighborhoods in New York City, where Sandy killed at least 18 people and knocked out power for hundreds of thousands.
Irizarry and her neighbors in Red Hook awoke Tuesday morning to find their homes and businesses flooded and badly damaged—some entirely destroyed—by five feet of seawater that rushed down the neighborhood’s main streets at around 7 p.m. Monday, according to eyewitnesses.
Irizarry opened Bomba Billiards 10 months ago, and now says she fears she may never be able to reopen. “I was just getting started,” she told The Daily Beast. “We were struggling to make ends meet with the opening costs, and we just finally got it going.”
The bar’s basement was entirely flooded, and beer bottles floated to the top of the stairs. “There’s thousands and thousands of dollars worth of stuff down there,” Irizarry said, including refrigerators that can cost up to $5,000 each.
“There’s no way I’m gonna make money now,” she said.
Irizarry spent the morning mopping the floors—“it still smells like fish everywhere,” she said—and taking stock. The water was so high that her pool tables, couches, and bar stools were soaked.
Power? Nope. Fresh fruit? Nope. Meat? No way. As New York begins its recovery, the logistics of getting back to regular life could prove tricky. David Freedlander reports.
The worst of the storm is over. Now comes the hard part.
New York City, where up to three-quarters of a million people were without power on Tuesday and parts of the city were still under water, is just beginning to reconnect to the outside world. Food, water, and vital supplies were heading into Manhattan as bridges and roadways began to reopen. Still, though, New Yorkers would be forced to go at least a day without fresh meat and fruit.
A woman shops for groceries by flashlight in the Tribeca neighborhood of New York, Tuesday, Oct. 30, 2012. (Richard Drew / AP Photo)
The massive Hunts Point market in the Bronx, which is the major food distribution point for the city, was shuttered Tuesday. Most restaurants and supermarkets were closed anyway, and workers had trouble getting to the site. The closure of the bridges meant the deliveries would have trouble reaching their destination. Still, Bruce Reingold, general manager of the meat market at Hunts Point, said that the market never lost any power, which saved thousands of pounds of fresh meat from spoiling.
“Our biggest concern was refrigeration, but we never lost any of it,” he said. “We expect to be open tonight.”
Rohni Nair, the owner of Trader Man Foods, a food wholesaler in Hackensack, N.J., likewise said her business was closed on Tuesday, but would reopen on Wednesday. Trader Man is a small distributor that mostly supplies restaurants and clubs in Manhattan, but Nair said that her problem wasn’t so much closed bridges and tunnels but that most restaurants remained shuttered and weren’t ordering food.
“All of the clubs in New York are closed,” she said. “It is not a matter of getting supplies in. It is a matter of people needing it.”
Nair added, however, that it would take until Friday at least until they would get fresh fruits and vegetables in, with the airport remaining closed, train lines a slog, and roadways still dangerous.
Amid the gloom and doom of Sandy, one woman has broken through as a shining beacon of optimism: Mayor Bloomberg's expressive interpreter, Lydia Callis. Watch our tribute to the signing star.
Sept. 11 … Katrina … Disasters have interfered with elections before, and they surely will again, but Congress has still done nothing to prepare for the next big one, writes Richard Hasen.
The destruction wrought by superstorm Sandy has been horrific enough, but if there’s anything to be grateful for, it’s the storm’s timing. If Sandy had hit just one week later, we’d be facing a constitutional crisis.
With the Capitol in the background, a fallen large oak tree lies on the National Mall near the Smithsonian in Washington on Tuesday after Hurricane Sandy. (J. Scott Applewhite / Getty Images)
As it is, there is plenty of speculation on the possible effects of the storm on the Nov. 6 election. There are multiple and conflicting answers to the concerns being raised—from political to statutory to constitutional—but they all obscure a larger and more troubling truth: there is absolutely no reason for us to be in this situation in the first place.
Of course, state and local governments have had to contend with elections disrupted by both manmade and natural disasters before. In 2001, New York City postponed municipal elections after the Sept. 11 terrorist attacks. In 2005, New Orleans and the state of Louisiana had to figure out how to let all of the voters displaced by Hurricane Katrina cast their ballots (PDF). Since those events, eminent election-law scholars have called on Congress to pass contingency plans for postponing federal elections, or at least modifying election rules, because of election-time disasters.
As the floodwaters and downed trees from Sandy continue to keep roads impassable and millions without power across the northeastern U.S., it’s worth stating the obvious: Congress has been gravely irresponsible in not drafting such contingency plans.
So what needs to happen?
First, when it comes to the presidential election, we need to clarify the rules dealing with postponing voting in parts of the country struck by disaster, extending polling hours, or allowing broader use of absentee ballots or other means of voting. Right now, what rules are in place are extremely murky.
(Prof. Steven Huefner of the Moritz College of Law at Ohio State University provides all the detail on the interaction of the U.S. Constitution, federal statutes, and state law, and it is not a pretty picture.)
Hurricane Sandy was serious business. Here’s how you can help with the recovery.
The "Superstorm" that plowed through much of the tri-state area Monday night has left millions without power, an untold amount homeless and hungry, up to 30 dead, and a recovery effort that's only just begun.
Relief organizations had days to prep for the storm, but still need the money and volunteers to keep going.
Want to help?
We've put together this handy list of ways you can lend your hand to help the East Coast rebuild, from donating by text message or spending time at your local shelter.
The Red Cross, which says nearly 11,000 people spent Monday night in 258 of its shelters across 16 states, needs volunteers. If you're over the age of 16, are available to volunteer for 12 hours later this week, and can carry and/or lift 50 pounds, email firstname.lastname@example.org. Otherwise, you can simply donate $10 by texting the word REDCROSS to 90999.
The Salvation Army is already running dozens of mobile feeding units and shelters along the East Coast in New York, New Jersey, Philadelphia, North Carolina, Virginia, and Maryland. The organization says that right now monetary donations are the most critical need. For more updates, visit their blog, and to donate, simply text the word STORM to 80888 to make a $10 donation.
Just 75 evacuees had arrived at a shelter in Red Hook as of Tuesday morning, but the number could rise.
A man put his cigarette between his lips and lightly jogged over to hold open the shelter door. Two women, Michelle Tampakis and her daughter Panagiota, were delivering muffins, 600 in total, to the NYC Tech College—currently the closest evacuation center to the partially flooded neighborhoods of Red Hook and DUMBO. The muffins arrived in boxes from Tampakis’s local bakery, after a client couldn’t pick them up due to the storm.
People walk past sandbags on a flooded street as Hurricane Sandy moves closer to the area on Oct. 29, 2012, in the Red Hook section of the Brooklyn borough of New York City. (Spencer Platt / Getty Images)
“Donating them to a shelter was my daughter’s idea,” Michelle said.
But a day after hurricane Sandy flooded the streets of Red Hook—a low-lying port neighborhood neighboring the East River, and containing the Red Hook Houses, the borough’s largest housing project—washing away not just sandbags but uprooting trees and leaving cars afloat, just a handful of people had sought out shelter from the city.
The college in Downtown Brooklyn has a capacity of nearly 8000 people, according to an Office of Emergency Management spokesperson, but the most recent tally on Tuesday morning counted only 75 evacuees at the shelter. In the lobby, roughly a dozen staff members sat in reflective vests with campus police—walkie-talkies clipped to their vests, a half a dozen flashlights resting on foldout tables.
As residents assess the damage from the flood, it’s possible that number could rise over the next few days.
Drizzling in fits and starts, some evacuees stood outside smoking next to banners reading “EVACUATION CENTER” in all-caps and in seven languages. Other evacuees were optimistically returning home. Edwin Ruic, 42, came to the shelter earlier this morning after passing a sleepless night with his wife and daughter in their Red Hook apartment. “I was worried something bad would happen so I came here,” he said. “My neighbors said the water had come all the way up to here,” pointing to his waist. Nevertheless, he and his family were returning to their apartment near Dikeman Street after a brief stay at the shelter. “We’re on a higher floor,” he said.
Shelter staff didn’t allow reporters beyond the entrance, but at least a half a dozen volunteers were turned away over the course of an hour. Kathleen McDonald, 61, a would-be volunteer who lives in the area, asked the staff if any of the other 18 Brooklyn shelters might need extra volunteers. She was told they did not.
Mitt Romney’s suggestion during the primary season that he might do away with FEMA has come back to haunt him in the wake of Sandy, writes John Avlon.
In the wake of Hurricane Sandy, President Obama has been coordinating storm response from the White House—while Mitt Romney has been dodging questions about what critics say was a primary campaign call to cut funding for the Federal Emergency Management Agency.
At a campaign stop in Ohio that hastily was rechristened a Hurricane relief event but nonetheless began with a Romney bio video, the candidate didn’t respond to what the press pool report said were 14 questions about FEMA funding.
The controversy stems from a tortured answer Romney gave at one of the countless Republican primary debates—when he lumped FEMA into a federalist argument about devolving funding and power to the states, specifically with regard to disaster relief. “Absolutely,” he said when asked if he’d support shutting the agency down and having the states handle emergency relief.
"Every time you have an occasion to take something from the federal government and send it back to the states, that's the right direction. And if you can go even further, and send it back to the private sector, that's even better.”
To be fair, it’s very unlikely Romney would defund FEMA as president. He was simply doing what he often does—pandering to a particular audience. As a rule, Republican candidates object to federal government power, while Republican presidents end up seeing its virtues when they are in control of it.
But speaking to Republican voters, Romney’s suggestion that disaster relief funding was part of the “immoral” growth of the deficit and debt illustrates a larger problem: the disproportionate influence that ideological activists have on our primaries at a time when the parties are so polarized. Practical considerations and common sense take a back seat to pandering to the cheap seats.
U.S. Republican presidential candidate Mitt Romney helps to load donated goods as he attends a storm relief campaign event in Kettering, Ohio, on Oct. 30, 2012. (Emmanuel Dunand / AFP / Getty Images )
The response to Hurricane Sandy shows just why we have a federal government as a backstop, particularly when our country is facing a massive natural disaster that does not neatly correspond to state lines.
Urges for “no bureaucracy. No red tape.”
Even though the worst of Sandy has passed, President Obama warned Americans that many areas are still at risk for more flooding and more damage. Speaking at the Red Cross Tuesday, the President said, “This storm is not yet over.” He praised officials for their coordination efforts and response, but said his message going forward to them is “no bureaucracy. No red tape.” In an earlier call with East Coast governors, Obama promised to make all resources available to relief and recovery effort, the White House said. The president will travel to New Jersey Wednesday to survey the devastation there alongside Gov. Chris Christie.
The wealthy prefer to convey their status through ornate mansions and fancy foreign cars. But in the wake of superstorm Sandy, the latest symbol of influence and power is power—literally. Dan Gross reports.
When the power goes out in New York, it goes out for everybody. Or almost everybody. As superstorm Sandy took out the region’s electricity transmission and distribution grids Monday night, turning much of Manhattan into an eerie black stretch of horizon, a few bright spots remained. The headquarters of Goldman Sachs—at 200 West Street in submerged lower Manhattan—shone brightly. And throughout the region, in the posh ZIP codes of Greenwich and Scarsdale, Great Neck and Summit, certain mansions glowed like oases in electricity deserts.
Forget the Porsche Cayenne SUV or the Fifth Avenue address: the new status symbol in the gilded communities of the tristate metropolitan area, where wealth is frequently and ostentatiously on display, may be a loud, blocky, unbranded amalgam of metal and plastic that is hidden from view and only comes into play a few days per year: a backup generator.
This week, power literally equals status. Like many financial firms, Goldman invested lots of money in a robust backup power system that kicks into gear whenever the grid goes down. And as disruptive storms like Sandy increase in frequency, backyard generators are becoming an essential part of the haute bourgeois suburban dream.
The power in my home in Westport went out at about 5:30. Connecticut Light & Power, which restores power with the same speed that Prince Fielder rounds the bases, said on Tuesday afternoon that 87 percent of the electricity customers in town were without power. But I am able to file this story because we had our own first responder: the Generac Guardian 10KW backup generator we installed last year. It immediately kicked into gear when the lights went out, and has been humming ever since—powering two home offices, a couple of televisions, a refrigerator, and a microwave, not to mention charging up cellphones for the neighbors.
Elsewhere in town, people in much larger homes are huddling in the cold, searching for candles, and struggling to connect to the outside world. But we’re comfortable, and carrying on as usual.
View of lower Manhattan during a blackout caused by superstorm Sandy. (Bebeto Matthews / AP Photo)
As with other accoutrements of the high-end lifestyle, not all backup generators are created equal. For example: the equipment has to be powerful enough to carry the load, it must be maintained, and it has to be located in the right place. New York University’s Langone Medical Center, just a few miles north of Goldman’s headquarters, learned that last lesson the hard way when its backup generator, which was located in the hospital’s basement, failed. The hospital was forced to relocate 215 patients, including several newborn babies, in the middle of the night. Gary Cohn, a member of the hospital’s board (and, coincidentally, Goldman’s president), noted that the building’s infrastructure is “not state of the art.” (Hat tip: Andrew Morse of Bloomberg, @morsea)
Until recently, backup generators “seemed to be the purview of the commercial space,” said Jonathan Miller, president of appraisal firm Miller Samuel and an expert on luxury real estate. Typically, they were considered de rigueur only by financial-services firms, health-care companies, and other vital cogs in the economy that can’t abide even a brief interruption in power. “But I wouldn't be surprised if we saw more interest in the introduction of this into residential buildings going forward,” Miller said.
A brilliant explosion, and then darkness: the morning after the Frankenstorm, Matthew DeLuca reports on the scene in lower Manhattan.
That is when Auria Adams said she looked out her window in the Lillian Wald Houses on East 6th Street and FDR Drive. She saw a brilliant flash of light, an explosion, at the Con Ed plant about nine blocks north in the East Village.
“It looked like lightning, a big lightning ball, at 8:34 on the dot,” said Adams, who had stuck out Hurricane Sandy with her 3-year-old son in their apartment just off of the East River and within what the city deemed Zone A, where Mayor Michael Bloomberg had ordered a mandatory evacuation. The substation blowout plunged much of Manhattan below 39th Street and parts of Brooklyn into darkness, with nearly a quarter-million customers, representing many more people, losing power.
“I didn’t think it was going to be this bad,” Adams said of Sandy’s impact.
Adams, standing outside Tuesday morning, stared into the engine block of her white Nissan, which had been filled with leaves after her street flooded. The waters pushed other cars out of their parking spots overnight, driving one across the street and then back head first into the same spot.
“It’s unsalvageable,” Adams said of her car. “It’s a sad, sad day.”
Adams was one of many Manhattanites struggling to put the pieces of their lives back together in Sandy’s wake. From the East Village down to Battery Park, the ocean-facing side of the city was filled with people coming to terms with the reality of Sandy’s power.
George Figueroa, 41, a porter at a Lower East Side apartment building, recounted a high-stakes rescue that unfolded there Monday night as water rushed into the entrance of a two-level parking garage that opens onto Avenue C.
Team Rubicon, a nonprofit that deploys veterans to help with disaster recovery, did their part to aid victims of Hurricane Sandy in lower Manhattan last week. Team member Curtis Coleman, a former Marine, shares his thoughts on heroic leadership.
As Hurricane Sandy barrels toward the northeast, see some of the most hilarious wind-blown reports.