Homeowners, Insurers Meet to Assess Loss

Unlike thousands of waterlogged houses in New Orleans, deSha Bahlinger’s home on the north shore of Lake Pontchartrain wasn’t swamped by Hurricane Katrina.

It was merely sliced in half.

Two pine trees slammed through the roof, demolishing the family room and the breakfast nook. A branch pierced the living room wall, pink insulation clinging to it like cotton candy.

But there’s no water, no mud. Many of the family’s possessions are OK. The house is uninhabitable, but it’s not a total loss.

“I look at it this way: I now have a much larger skylight than I did before,” Bahlinger said.

On Thursday, she was waiting in the humid heat with her ex-husband, Bruce, for their insurance adjuster to complete his evaluation, the first step in the long process of having a whole house and a normal life again.

After the storm, after the tears, come the insurance claims. The insurance industry expects to pay out $60 billion or more from Hurricane Katrina, its biggest natural disaster ever. Hurricane Andrew in 1992 held the previous record, at nearly $21 billion.

The thousands of water-damaged houses in New Orleans will yield many of the biggest and most contentious claims, as insurers and policyholders dispute whether the destruction was caused by the hurricane’s winds (and thus would be covered under homeowner policies) or flooding (which requires a separate policy that many did not have). Consumer groups are saying all hurricane damage should be covered, whatever its origin, a position that is anathema to the industry.

At the moment, neither the New Orleans homeowners nor the adjusters can get in to survey the wreckage.

But in communities like this town of about 11,000 at the foot of the Lake Pontchartrain Causeway, where news cameras were scarce but hurricane damage was heavy, the post-disaster ritual of haggling over the insurance check is well underway.

State Farm Insurance Cos., the biggest insurer on the Gulf Coast, had 270,000 homeowner and auto claims in the hurricane zone as of Friday. Industry executives say that the vast majority of disaster claims are settled promptly, but that doesn’t mean there are no attempts at negotiating -- or instances of frustration.

The Bahlingers, for instance, wondered about all the other trees that fell in their yard, the ones that missed the house. It will cost thousands of dollars to cut them up and remove them.

“Trees aren’t covered if they don’t hit the property we’re insuring,” said their adjuster, State Farm catastrophe specialist Greg Baker.

“What if I put a bike under one of the downed trees?” wondered deSha (pronounced de-SHAY).

“Does the grass count as property I’m insuring?” Bruce asked.

He’s a 47-year-old independent geologist who lives nearby in a town house that was untouched by the storm; she’s a 45-year-old homemaker who looks after their two children in this brick four-bedroom, or did until Katrina’s imminent arrival made evacuation seem, for the first time, a good idea.

The name of the neighborhood is the Timbers. Only one guy didn’t leave, and his home was untouched. For many, the devastation ranged from bad to total, as if the area had been pelted with logs from a great height.

Mandeville is a white-collar commuter town; many residents took the causeway -- 24 miles over Lake Pontchartrain -- to their jobs in New Orleans. It’s heavily wooded, although somewhat less so these days. After the storm, the roads into the Timbers were all but impassable.

Bruce ventured back first. He called deSha in Baton Rouge, where she has family, and asked whether she was sitting down. “Are we homeless?” 11-year-old Christian wanted to know. They were.

Like many of their neighbors, the Bahlingers, both Louisiana natives, haven’t given any thought to leaving. They remember Hurricane Betsy in 1965, the last big storm to hit the area, and feel pretty confident it will be that long until the next one.

“New Orleans has been there how long, 200 years?” Bruce said. “This is a once-in-a-lifetime hurricane.”

“Definitely,” deSha said. “Hopefully.”

She peppered the adjuster with questions. Did he notice this crack in the bathroom? Are packing materials for the items in the kitchen covered? An initial call to State Farm last week had yielded little action. But then deSha heard that someone from State Farm was over at her friend Sue’s house down the street, and she literally dragged Baker over. He promised to take over her case.

State Farm has been disbursing $2,500 checks to tide people over, but the sooner the real money arrives, the faster a contractor can be secured for rebuilding.

It will be an ordeal. Tens of thousands of people, at a minimum, are competing with the Bahlingers for equipment, supplies and skilled personnel. Storage facilities for the household goods? All booked up. Tree guys? More popular than Mardi Gras royalty.

Baker, too, is in high demand. He’s a five-year veteran with State Farm, the last two as a member of its elite catastrophe team -- 2,600 adjusters who are ready to go on a moment’s notice to a disaster site, and live there for months.

Many will be camped out for quite a while. Last year, Baker, 32, spent seven months in Florida after four hurricanes hit the state. “If I were married, I probably couldn’t do this,” he said.

Baker is another native, driving his white Chevrolet Express van, equipped with an office in the back and snacks in the front, every day from his house in Lafayette. It’s at least 90 minutes from the territory he’s working in north of Lake Pontchartrain.

“The tree removal guy, let me know what he charges,” he told deSha. “Let me know if it’s outrageous.” But he couldn’t give her quite yet what she wanted most -- either the check or at least an estimate. Sunday, he promised.

The house, which the Bahlingers have owned for 11 years, was worth about $200,000. Like most people, they weren’t too interested in insurance until it became crucial.

Baker’s last stop of the day is with Joe and Fay Martin, who live a block away. If the Bahlingers were surprisingly good-humored, this couple was positively serene. Maybe that’s because only one of the 15 trees that fell in their yard caused real damage. It went through the dining room ceiling like a spear.

Joe is 85, and Fay is 81. They’ve been anticipating the big one for so long that they gave up on it ever arriving.

In May, Fay noticed the couple’s homeowner insurance premium had risen nearly 25% in one year, to $1,343. To keep costs down, she raised the hurricane deductible to 2% of the house’s value, which was about $150,000.

This would have been a wise move at just about any time in the last couple of decades, when hurricanes usually were mere rumors. It turned out to be a very bad idea three months before a Category 4 plowed through town.

“I saved $200 to lose $3,000,” Fay said, laughing at her bad timing.

Watching over the insurance proceedings is the couple’s son Danny. His home was untouched. His neighbor’s is fit only for the bulldozer.

“It’s sort of like a pinball machine. You don’t know where the ball is going to go,” said Danny, a medical device salesman.

Katrina might inspire the Martins to do some things differently. They’ve decided they hate the timbers in the Timbers.

“Those pine trees make it look like the telephone company put 46 telephone poles in our backyard,” Fay said.

“I’ve got it in my mind to take them all out,” said Joe, a former cabinet maker and professional jazz harmonica player.

Baker came back from the truck with his write-up. After the deductible, and the $2,500 advance the Martins had received, the payout was $7,615.70. He handed them a check, and began the long ride home.

As for the Martins, they’re probably going to renew their policy just as it is, keeping the deductible. The odds of another hurricane are slim, they figure, and this way they’ll save money on premiums that will, in any case, be going up.

Staff writer Kathy M. Kristof in Los Angeles contributed to this report.