NEW JERSEY – The people of the Jersey Shore may feel alone in the world right now, their homes destroyed and their beaches ruined by Hurricane Sandy.
But they will soon face a decision familiar to others who have survived massive storms: do I rebuild? There is a reason New Jersey governor Chris Christie called the destruction Sandy wrought on the shoreline “unthinkable”. The one-time holiday paradise, familiar to fans of Bruce Springsteen, is now a twisted wreck, with remnants of a roller coaster floating in the ocean, and houses erased like they were temporary markings.
“That’s our resort, that’s our Caribbean island, it’s everything to us,” says Rosemarie DiPisa, a New Jersey estate agent who has a home on the barrier island community of Lavallette. With no physical access to the island, she will not know for at least two weeks if her house is still there.
In the days and weeks to come, there will inevitably be a debate about whether there is any point in trying to reconstruct what was lost, as in New Orleans’ Lower Ninth Ward after Katrina or in parts of Miami after Andrew.
The cost of rebuilding quickly can be astronomical, especially as people compete for limited resources, with equipment in short supply and a dearth of contractors. Insurance is unlikely to cover the full cost of rebuilding and replacing damaged belongings, let alone other costs such as renting another home to live in.
It would be one thing if there was a quick path to recovering that investment, but history shows there is not. After Hurricane Camille struck the Gulf coast of Mississippi in 1969, it took a generation for homes in the area to appreciate enough to recoup reconstruction costs. Just don’t tell that to Jersey Shore locals.
“I’ve lived here all my life. I have a loyalty to this town. You can rebuild houses. You can’t rebuild lives,” says Robert Berentes (22).
Berentes is not alone. The ocean breeze seems to get into people’s bones, drawing them back to the shore year after year. DiPisa says the market for million-dollar luxury homes was booming on the shore before Sandy.
But determination to rebuild is one thing and capital is another. How wiped-out homeowners and business proprietors will pay for repairs is still uncertain.
Marie O’Neill was told her insurance would not cover the destroyed contents of Mueller’s Bakery in Bay Head, New Jersey, the business she has owned since 2003, only the building itself.
“We are completely destroyed,” O’Neill sobs. “Everything has a layer of sand and mud.”
And yet O’Neill and her husband plan to rebuild the business, even at an estimated cost of up to $600,000 (€468,000).
One of the companies used by insurers to project disaster losses says Sandy may end up causing $20 billion in insured losses and $50 billion in economic damage, making it one of the costliest disasters on record in the US.
Insurers say they have already started writing cheques, though it will take years to settle some claims. Homeowners may have to litigate with their insurers over what destroyed their homes.
As absurd as it may sound, the “wind versus water” debate is one of the most important in the insurance industry. Wind damage is covered by homeowners’ insurance policies, while flood damage is covered by the federal government’s national flood insurance programme, assuming the homeowner took out a policy.
But when a home is wiped off the face of the Earth in a storm like Sandy, how do you prove which one caused the damage, and who pays?
Insurance recovery experts warned this week that the disputes over Sandy would carry on for years, leaving many people to spend their own money first and hope for recovery later.
There are few people who know more about the “rebuild or not?” decision than Marc Roy, who was chief of staff for the Federal Emergency Management Agency in Louisiana in 2006 and 2007, in the aftermath of Hurricanes Katrina and Rita. “I think it’s been proven throughout the last 100 years that people are going to live where they are most comfortable, and rebuilding in metropolitan areas is, I think, a given from now on,” says Roy, now a professor at Tulane University law school.
In the early days after a disaster, people tend to rebuild to the standards that existed before the storm, rather than to more modern standards designed to make buildings stronger, Roy says. That changes over time as insurance companies begin to insist on improved standards as a condition of coverage. But it will also take recognition among policymakers that it is worth the money to rebuild better.
The only problem with rebuilding is if a storm hits again, says Karen Clark, a pioneer of scientific modelling of natural disasters. “We don’t do ourselves any favours by talking about storms of the century . . . making it sound to the lay people like this . . . will never happen again.”
The decision to rebuild will not be an economic one for most people – emotion will overrule most practicalities. “If you’re afraid of water, you don’t live in this town,” says Irene Conti (67), who was cleaning out the flooded garage of her rental property in Bay Head. “It’s a beautiful town, a beautiful lifestyle.” – (Reuters)