Newsgroups: biz.americast.samples
From: usa-post@AmeriCast.Com
Organization: American Cybercasting
Subject: Sample USA Today bonus Fri, Aug 28 1992
Date: Fri, 28 Aug 92 05:22:47 EDT

This is an actual portion of the electronic edition of the USA Today, as
distributed by American Cybercasting.  For more information, send e-mail
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08-28 0000
BONUS: Assessing Andrew's damage
USA TODAY Update
Aug. 28-30, 1992
Source: USA TODAY:Gannett National Information Network
    
   Hurricane Andrew was still swirling out in the Caribbean on 
Sunday. It hadn't even blown over its first Florida palm tree. And 
already, CNN was releasing estimates of expected damage: $10 
billion to $15 billion. Then, as Andrew plowed through south 
Florida on Monday morning, new numbers began to surface. Some came 
in as low as $3 billion. Dade County officials were saying costs 
could hit $15 billion to $20 billion, the range that's been picked 
up and repeated by most newspapers.
    
DOES ANYONE KNOW THE AMOUNT OF DAMAGE?
    Let's face it: When forecasts range from $3 billion to more 
than $20 billion, chances are that no one really knows how much 
damage was done. If nothing else, the numbers spewed out in 
Andrew's wake only show that putting dollar figures on disaster 
damage is about as scientific as looking for water with a divining 
rod. The first reasonably reliable estimates aren't likely to show 
up until next week, when officials from the respected Property 
Claims Division of the American Insurance Services Group finish 
sorting through the devastation in Florida and Louisiana.
    
HOW MUCH PROGRESS HAS BEEN MADE?
   "We have been screaming at everyone not to rely on damage 
estimates yet," says Peg Malloy, spokeswoman for the Federal 
Emergency Management Agency. "We have just begun making damage 
assessments on site." This wouldn't be the first time that wildly 
inaccurate numbers have emerged from the rubble of a natural 
disaster. When San Francisco was hit by an earthquake Oct. 17, 
1989, USA TODAY initially reported damage estimates at around $1 
billion. Other reports pegged it as high as $12 billion, recalls 
Ted Gibson, economist for the California Department of Finance. 
The real cost totaled somewhere between $5.6 billion and $7 
billion.
    
WHERE DO EARLY ESTIMATES COME FROM?
   But even now, nearly three years after the quake, no one knows 
for sure what the final tally is. So where do those early damage 
estimates come from, anyway? Smoke and mirrors, mostly. Look at 
Dade County's figures of up to $20 billion in damages from 
Hurricane Andrew. Kathleen Hale, Dade County's 
emergency-management director, told Ted Koppel on "ABC News 
Nightline" on Wednesday that the figure was reached by estimating 
conservatively that 10% of the county's $250 billion worth of 
insured property was destroyed by the hurricane.
    
ARE FIGURES ACCURATE?
   Wouldn't 10% of $250 billion be $25 billion, not $20 billion? 
Oh, never mind. Dade County officials, reeling from a devastating 
hurricane, had better things to do than come up with a perfectly 
accurate estimate of damage. "During the height of the storm or 
earthquake or fire, when you're trying to deal with lives and 
homeless people, it's very difficult to really think very much 
about the dollar costs," says Gibson, who's dealt with plenty of 
disasters in California. "We tend to clean up first and tote up 
the real costs afterward."
    
WHO WANTS NUMBERS IMMEDIATELY?
   There is always an immediate demand for some kind of damage 
estimate. Reporters, maybe by nature, always seem hungry for some 
kind of official statistic to wrap their stories around. Local 
officials hate to say they don't have an answer. So even when it's 
obvious it's too early to calculate the real costs of a disaster, 
"reporters ask, officials answer. It's human nature," Gibson says.
    
WHO ELSE NEEDS NUMBERS?
   Government officials need estimates, no matter how tentative, 
to get some idea where to spend money and deploy relief workers in 
hard-hit areas. Publicly traded insurance companies need to give 
shareholders some idea how much the insurance claims are going to 
cost. So damage estimates are born - and often take on lives of 
their own. Also contributing to the bad information: Local 
officials, often stunned by the disaster, tend to overestimate 
costs.
    
WHY ARE ESTIMATES SO OFF BASE?
   When Hurricane Hugo hit the Southeast nearly three years ago, 
the wildest cost estimates came from officials in the small 
coastal town that were hardest-hit, recalls South Carolina 
Insurance Commissioner John Richards. "They are living in the 
catastrophe, and their estimates aren't based on scientific 
projections like the formulas used by the insurance industry," 
Richards says. "It's hard to see how people can get a scientific 
number right away," agrees Sean Mooney, economist at the Insurance 
Information Institute.
    
WHAT ARE THE COST FIGURES?
   Early estimates often blur distinctions between different kinds 
of costs. Essentially, two separate cost figures emerge from 
disasters: One measures the damage to insured property. The other 
totes up total damages, including indirect economic costs such the 
 revenue retailers miss out on. The two numbers can differ wildly. 
For instance, the insurance industry has pegged losses on insured 
property from Hurricane Hugo at $4.2 billion. And FEMA has put 
Hugo's total economic cost at $10 billion.
    
HOW CAN MISTAKES BE MADE?
   In the early stages of the disaster, the two numbers can get 
confused. The media often focus on the highest number. Assessing 
costs is just hard work. It's easy to make mistakes toting up the 
cost of disasters. When fires swept through Oakland Hills, Calif., 
in October, for instance, some reporters calculated damages by 
multiplying the average cost of homes there by the number of homes 
destroyed by the fire. Seems to make sense, right? Wrong. The 
reporters forgot that housing prices include the cost of the land 
beneath the houses. And, bad as the fires were, the land survived.
    
IS EVERYTHING INCLUDED IN ESTIMATES?
   Media estimates of fire damage reached as high as $4 billion, 
four times the real cost, Gibson says. What's more, damage to 
large buildings and public property is often overlooked in initial 
damage assessments. Cracks in the foundation of skyscrapers or 
bridges may not show up for months. And how do you put a price on, 
say, Homestead Air Force Base, which may not reopen after 
Hurricane Andrew? Indeed, some things are impossible to put a 
value on.
    
CAN INSURANCE COVER EVERYTHING?
   Linda Gruhler-Subock of Cutler Ridge, Fla., says one of her 
neighbors, a career military man, lost all his war memorabilia in 
the hurricane. She can't find the wreath she wore in her hair on 
her wedding day. And the poetry she wrote with her husband is 
missing, too. "There's no way to replace that," she says. Then 
there's Marvin Mossberg of Perrine, who spent six months building 
a model ship, which he then hung up on the wall. Hurricane Andrew 
swept it all away. "The insurance company will never give me 
enough to pay for all the hours of work I put in," he says.
    
WAS ANDREW REALLY THAT BAD?
   Despite the uncertainties, no one doubts that the hurricane was 
devastating. "Just the Cutler Ridge Mall, that was completely 
destroyed," says appraiser Michael Slade. "That's $75 million to 
$100 million right there. And I saw probably 20 to 30 
quarter-million-dollar boats cracked up just on one pier. So you 
start adding up the numbers, and they get pretty big pretty fast."
    
Bonus Editor: Beth Mann. (1-919-855-3491) Making copies of USA 
TODAY Update (Copyright, 1992) for further distribution violates 
federal law.

This article is copyright 1992 Gannett News Service.  Redistribution to
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