Business Reporters Count Insurance Toll from Hurricane Katrina

The cost of Hurricane Katrina goes beyond dollars and cents, and yet the business desk knows that's where their stories lay.

So in tracking the heaps of insurance claims in Louisiana, Alabama and Mississippi, business reporters try to determine the price of what they describe as the most expensive natural disaster in America.

They interviewed risk management consulting firms and insurance companies that quoted damage cost estimates ranging from $26 billion to $35 billion, and still growing. For context, they point out that number already tops $21 billion in damage assessments for Hurricane Andrew, Katrina's costliest predecessor, and four back-to-back hurricanes that hurtled through Florida last year.

Plus, they add, tally up things like lost work hours, demolished roads and sewer systems, weakened tourism and uncovered flood victims, and Katrina's bill jumps to a staggering $100-plus billion.

"It just keeps getting bigger every day," says Ted Griggs, a business reporter who covers insurance for The Advocate in neighboring Baton Rouge, La.

Getting a grip on that growth is an overwhelming task. But Griggs suggests talking to several insurance providers to get some sort of confirmation on cost estimates. "Talk to their rivals," he says. "Check with other sources."

He says business reporters shouldn't feel uncomfortable asking about the financial price tag of a hurricane that took such a human toll. "You're still trying to find out what that means to people," he says. "And I think insurance companies are pretty used to answering those questions anyway."

For the everyday people who lost their homes and belongings, he says an interview about insurance claims can be more therapeutic than intrusive. "You have to be sensitive to them," says Griggs, who talked to hurricane victims standing in line at insurance claim mobile units. "But people are people. Just talk to them. This is a kind of shared experience that makes people less reluctant to talk."

Some publications opted to go straight to the Insurance Information Institute, which published a set of frequently asked questions that filled a dozen pages on topics from debris removal coverage to car flooding.

The Sacramento Bee took a look at past hurricanes to gauge the future costs of Katrina to the insured. Based on post-Hurricane Andrew rates, "home insurance rates next year will soar," predicts reporter David Whitney in his story. "After four hurricanes hit Florida last year, causing collective damage of about $23 billion, rates this year have gone up between 15 percent and 20 percent, the American Insurance Association said."

The Christian Science Monitor panned back to preview a new trend of re-evaluating homeowner insurance policies in Katrina's wake. MarketWatch.com discussed how insurance companies were getting employees into the ravaged areas, while InformationWeek spotlighted new wireless satellite-equipped vans that let adjusters in those areas talk directly with headquarters hundreds of miles away.

That technology may have appealed to Griggs, who says his biggest challenge was simple logistics. Cell phone service ruptured, preventing him from calling roving insurance company spokespeople. As a result, he drove a few times to the nearby mobile insurance unit, waiting in traffic during one return trip for 1.5 hours to go five miles, thanks to Baton Rouge's surging population. The combination made reporting Katrina's aftermath more difficult than with hurricanes of the past.

"We've been trying to do this story for a while," Griggs says. "Usually they have insurance estimates right after a storm."

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism