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CNN Live Today

Just a Swipe from Rita Could Deepen New Orleans Catastrophe; Disaster Insurance Tips

Aired September 22, 2005 - 10:31   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DARYN KAGAN, CNN ANCHOR: We are just past the half hour. Good morning once again. I'm Daryn Kagan.
Let's take a look at the latest on Hurricane Rita. The sustained wind speed has dropped just a bit, but still 170 miles an hour. But the National Hurricane Center says it still is a potentially catastrophic Category 5 storm. A hurricane watch is out for most of the Texas coast into Louisiana. More than a million Texans are under a mandatory evacuation order. And take a look at the freeways. They are clogged as residents seeking higher ground.

The waters are lapping Galveston. They might not be too rough right now, but officials are warning against complacency. The National Hurricane Center director Max Mayfield says that if Rita maintains its intensity, it could be worse than Katrina was.

Well, in the wake of Katrina, a lot of homeowners along the Gulf Coast are finding that Katrina delivered the first blow; reality, the second. They learned far too late that their homes were underinsured.

We don't want you to make the same mistakes, so joining us with our top five tips on how to protect yourself from that danger, our personal finance editor Gerri Willis. Gerri, good morning.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Daryn, good to see you.

Tip number one, you've really got to understand the lingo if you want to make sure you have enough insurance to cover any losses. A lot of people have what's called cash value insurance. That means that if you have a loss, you may not get the money that you need to fix your house, buy the new furniture, particularly for contents. That's because your insurer is going to give you something less than what you paid to buy the content in the first place. It's called depreciation. That's the amount of money that they say makes up for the wear and tear.

If you want the money, what it costs to replace your contents, you're going to have to get replacement cost insurance. It's about 10 percent more, but I got the tell you, Daryn, it's really the way to go. If you have a horrible loss, it's the only way to get the money you need.

KAGAN: What about inflation?

WILLIS: Inflation is a very big deal. In fact, about 60 percent of homes are probably undervalued when it comes to their insurance by about 22 percent. That means inflation keeps rising, the value of your house keeps rising, but the amount of money you have insuring it does not.

Or, another thing Americans do, they improve their house and they never tell their insurance agent. So you don't have enough coverage. One way to check it out, go to acucoverage.com. It's a Web site. For about $20, you can figure out if you have enough coverage or not. Quick way to do it, it will cost you about $20.

Most policies now, however, will allow you to take this into consideration every year when you pay your premiums. So it's a great way to make sure you're covered.

KAGAN: To do a check-up. Also, when you're doing that, you want to think about the valuables you have.

WILLIS: Right. If you have an art collection, if you have a baseball card collection, if you have furs or jewelry, keep in mind you may not be covered for those if there is some horrible, catastrophic thing that happens to your home. You're going to have to buy extra coverage, extra protection to make sure you're covered.

KAGAN: OK, here's the thing, the big controversy along the coast. Flood insurance.

WILLIS: Right, exactly. Well, Daryn, I know you've covered this a lot, you've talked about it a lot. Most people don't have flood insurance. And, guess what, 70 percent of us live along the coast. Do you know that you're 26 times more likely to be hit by a flood in this country than you are by fire? So many people need this. So many people don't have it.

And typically, it's going to cost you about $400 to $500 a year. I know that's a lot of money, but what we've seen with Katrina, you can see that it may be worth your while to make sure you have protection, because your homeowners insurance policy will not cover you.

KAGAN: And then finally, we may live nowhere near the Gulf Coast, but we're all going to end up paying for this insurance disaster, aren't we?

WILLIS: You bet, you bet, Daryn. That's absolutely right. You're going to probably see your costs for insurance rise because of what's been going on. After Andrew, for example, in the state of Florida, we saw prices rise 100 percent. It's not atypical. Steel yourself for that eventuality. It's probably going to happen. And make sure you're covered at the end of the day, because a lot of people have found they are not. And I know, for many people, their home is their biggest asset, and they've got to make sure that they have enough coverage.

KAGAN: Gerri, thank you. Really good tips, even for those of us that live nowhere near the hurricane zone. Appreciate that.

WILLIS: You're welcome.

KAGAN: So a lot of -- excuse me, a lot of people -- we were seeing the traffic video there, trying to get far away from the dangers of a hurricane. Some people, though, actually on their way in, on purpose. That includes the man behind this Web site, Chasing the Storm, when CNN LIVE TODAY continues.

MARY SNOW, CNN CORRESPONDENT: I'm Mary Snow in New Orleans, where the city is bracing for potential flooding once again. This as crews race to repair damaged levees. I'll have that story coming up, when LIVE TODAY continues.

(COMMERCIAL BREAK)

KAGAN: I want to take a look at New Orleans right now. Right now, the Big Easy does not appear to be in the direct path of the Hurricane Rita, but it won't take much more than a swipe to deepen the catastrophe that was left by Katrina. In fact, 500 buses are already standing by if the need arises to evacuate.

Our Mary Snow is in New Orleans with the latest on that -- Mary, good morning.

SNOW: Well, Daryn, good morning to you. And really, New Orleans is bracing for any kind of effect from Rita. Right now, the forecast is calling for two to four inches of rain. However, there is a probability that if that storm turns, that could mean six to eight inches of rain, and that is significant because of the weakened levees.

Crews have been racing to shore up those levees because they've been so damaged and, of course, with the levees failing, that is what caused devastating flooding from Katrina.

Right now, we are seeing crews shoring up the 17th Street levee. There are tons of sand and gravel being placed there. There are also sheet piles being placed at the mouth of the levee, this in order to stop a storm surge. What really -- what engineers say depends on how much flooding there could potentially be depends on how quickly this rain comes in. And that is being monitored very, very closely.

A short time ago, Carol Costello was speaking with a engineer from the Army Corps of Engineers. She asked him about a storm level on a scale of one to 10. Right now he is saying between five and six.

As for residents here, really unclear just how many people are still in New Orleans. There was a report a couple days ago putting an estimate of about 500, but the city's mayor's office is not really giving a number. Yesterday we were at the convention center all day, and that is where people were told to go if they needed transportation to get out of New Orleans, that buses were standing by. We saw under 20 people going to the convention center to get on those buses, because there are a lot of people who are not here in New Orleans, where there is a mandatory evacuation -- Daryn.

KAGAN: All right, Mary Snow, live from New Orleans. Thank you. Focusing back now on Texas now. They are doing everything they can, getting ready, trying to get people out today. The focus is on evacuation. And we heard about that from Steve Mcgraw. He is with the emergency management of the state of Texas, and here's what he had to say just a few minutes ago.

(BEGIN VIDEO CLIP)

STEVEN MCGRAW, TX. GOV.'S DIV. EMERG. MGMT.: Today is a very, very important day. These next 24 hours, you must accomplish all the tasks that you have, and that is to ensure the safety of these citizens, and the shut down of the petrochemical industry on the coast of Texas, to go through those shutdown procedures that will begin today, and the supervision and the execution of that from TCEQ, General Land Office, Railroad Commission is very, very important. The critical element of information today is that that shuts down cord to their plan.

(END VIDEO CLIP)

KAGAN: And so it's all about trying to get people out. Unless you're a hurricane chaser. We're going to talk with a hurricane chaser just ahead. He has put up a Web site, and is planning on giving you live streaming pictures of Hurricane Rita as it slams into Texas.

We'll take a look at the Web site and talk with the chaser just ahead.

(COMMERCIAL BREAK)

KAGAN: I want to show you a familiar face on the left part of your screen. That is Max Mayfield, director of the National Hurricane Center. He is testifying via videophone, or videoconference line, in front of the House Select Committee on Disaster Prevention, and looking back On Katrina. Keep in mind he's talking to Republicans. This is an investigation committee that the Democrats have refused to participate in. They would like to see an independent commission look at what went wrong with Katrina.

Our next guest plans to hunker down in harm's way. He's going to try to document Hurricane Rita's rampage on his Web site. It's called hurricanelivenet.com.

Hurricane chaser Mark Sudduth is joining me now by phone. He is near Galveston, Texas.

Mark, good morning.

MARK SUDDUTH, HURRICANELIVE.NET: Hey, good morning, Daryn. How are you?

KAGAN: I'm doing good.

For somebody who lives for hurricanes, I guess this is the big one, huh? SUDDUTH: Yes, it's another big one. We never thought we'd have two big ones in the same year, but we here we are.

KAGAN: And what are you expecting to see out of Rita?

SUDDUTH: Well, it's looking very bad, but the forecast, I think, is going to be a little bit of an improvement, that the hurricane is expected to weaken, and it may hit closer to the Louisiana-Texas border. We're waiting for all that new information. So it may be looking a little bit -- and I emphasize "may be" and "a little bit" better for Texas, and perhaps worse for Louisiana. So we're expecting a lot of this Daryn.

KAGAN: And what are you -- how are you planning to document this and show this on your Web site?

SUDDUTH: Well, what we have done is to be able to set up live streaming video, and I think that it's showing right now...

KAGAN: Yes, we're looking at the Lake Jackson area, near Galveston?

SUDDUTH: Correct. I'm driving around in my specially-equipped hurricane-tracking vehicle. And this Lake Jackson area is a ghost town already. There is nobody here to speak of. Driving right in front of a Lowe's store that would normally be busy. The OfficeMax, the banks, everything around here are just completely vacant and empty, yet the sun is shining. It's these kinds of images that I can broadcast live, and it's just over a little Sprint card, like you guys have the Blackberries. I saw Anderson Cooper with all the data. And it's just the same kind of stuff that consumers use. but I'm using it to do live documentary, is what it comes down to.

Now I'm not going to be sitting in this truck.

KAGAN: Yes, well, that was my next question. I mean, that's all well and good while it's sunny, Mark, but what happens when the storm slams in?

SUDDUTH: When the storm comes, we're going to put three storm- case boxes, like black plastic boxes that are watertight, with batteries, and a laptop and one of these little Sprint air cards in each of them, and transmit live video. Think of these as virtual stormchasers. One of your producers sort of helped me coin that phrase yesterday in Galveston, three virtual storm chasers that we can put where it would absolutely be lethal for us to be, and then let that broadcast via streaming video to hurricanelivenet.com, allowing people to see what is going on in the worse possible conditions, and yet it's keeping me out of harm's way, something that Max Mayfield has urged me to do for years and years and years, is to not sit out there in my truck and do this, and we have accomplished that this year.

KAGAN: Well, Max is not the only one who will be relieved to see that you got it through your skull that this is a better way to do it, and technology helping there.

Mark, we look forward to seeing those pictures. Once again, the Web site where people can watch, hurricanelivenet.com.

SUDDUTH: Yes, it is. Thanks a lot, Daryn.

KAGAN: All right, good luck with that coverage, Mark Sudduth, on that Web site.

(STOCK MARKET REPORT)

KAGAN: This is about the time of day when we get the latest advisory on the hurricane. It's not in quite yet, but we will check back for those latest numbers and information in just a moment. We're back after this.

KAGAN: Want to focus again -- once again -- on the Houston area. Tons of people trying to make their way out of the city as Hurricane Rita gets even closer and closer. But they're not getting very far very fast. We talked with one man in this last hour who had traveled a total of 48 miles in the last 13 hours.

Our own Deborah Feyerick finds herself in the middle of the muck on Highway 59, just north of Houston. Deb, good morning.

DEBORAH FEYERICK, CNN CORRESPONDENT: Good morning, Daryn. Well, we can tell you, we have a serious case of lane envy here. We're heading north of the cars heading south. They're flying at about 75 miles an hour. We are inching our way. We've made basically -- I've been looking at the clock and looking at the speedometer and we have made -- we're going about one mile for every half hour. Every half hour to 40 minutes, you're making it about a mile. So it's just -- it's really backed up.

Cars have broken down on the side of the road. People looking forlorn as they wait for help. Everybody evacuating. Some folks with trailers tied to the back of their cars. One man, he was transporting cattle. Another man had a boat on the back of his car. So everybody's trying to inch their way. The thing we're not seeing is anybody changing lanes. There's really no point because nobody is getting anywhere fast -- Daryn?

KAGAN: And where are you ultimately trying to get to, Deb?

FEYERICK: We're trying to head to the airport, actually. It's just to situate ourselves. When we left Galveston at 4:45 this morning. And it's a 48-mile drive to the airport. Usually takes about an hour. But we've been on the road now for five hours. It's brutal. And they're not going to be opening up 59 going one direction. They're going to be doing that on I-45, which is what we were on.

And as a matter of fact, we got word that they were going to begin making all traffic northbound once you got past Houston. Then we turned off to get on Highway 59, but no luck on this stretch of the highway. So everybody just crawling, crawling along.

KAGAN: All right. Deborah Feyerick, good luck getting where you need to go. Thank goodness your two little girls aren't in the back seat saying are we there yet, are we there yet? Because you're not even close.

FEYERICK: You better believe it.

KAGAN: Thank you.

Ahead in our next hour of CNN LIVE TODAY, a live update and analysis on the Senate Judiciary Committee's vote on chief justice nominee John Roberts.

Plus, all the latest preps for Hurricane Rita, as the second hour of CNN LIVE TODAY will begin after this quick break.

(COMMERCIAL BREAK)

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