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Huge Fire Burns in Queens; Rescue Under Way in New Jersey Towns; Destruction along Jersey Shore; Aftermath of Superstorm Sandy; Berm Fails, Rescues in Three New Jersey Towns; Sandy's Effect on Your Deductible

Aired October 30, 2012 - 09:00   ET

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

CAROL COSTELLO, CNN ANCHOR: And good morning to you. I'm Carol Costello. Thanks for being with us. We begin this hour with a story that's shaping up to be nothing short of a national tragedy.

An historic superstorm that covers a thousand miles and impacts millions of lives. At least 16 people are dead and floodwaters are washing across the most populated corridor in the United States. The region largely paralyzed this morning.

Airports, trains, bridges shut down. In New York, the head of the century-old subway system says it has never faced this kind of devastation. We'll join a news conference from New York's mayor at any moment now.

In the flooded borough of Queens, at least 50 homes continue to burn. Electrical fires and power outages are only adding to the misery in the eastern United States. To give you an idea of just how massive Sandy still is, fierce winds are blowing in from Canada all the way to Georgia. This morning, some seven million homes and businesses are without power and heat.

Sandy is also whipping up huge amounts of snow from Maryland to Tennessee and West Virginia, a blizzard could dump three feet of rare October snow.

CNN's crews are scrambling to bring you all the latest information on this epic disaster that's continuing to unfold. Our reporters are at some of the worst points of the superstorm and breaking down the details on how all Americans could feel Sandy's impact.

Right now, we're following rescues and evacuations under way across much of the region. In northern New Jersey there's been a breach in a berm and several communities are now flooded. One police chief says there's up to five feet of water in the streets of Moonachie and Little Ferry. And rescues are also taking place in Carlstadt.

CNN's Maggie Lake is on the scene. She'll join us once she has the latest -- actually she's having trouble getting to the scene because the roadways are so bad. When she arrives on the scene, she'll bring us much more information.

Sandy's trail of devastation goes beyond flooding. A fire has destroyed at least 50 homes in the Breezy Point neighborhood of Queens, New York.

CNN's Deborah Feyerick is covering that part of the story.

Good morning, Deb.

DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT: Well, good morning. We want to tell you, the damage out here is extraordinary. Some 50 homes, more than 50 homes, burned to the ground over night. Over on this side of the bay, homes, missing their faces, the faces just sheared off.

This gentleman and his family, they were here overnight. And I want to -- this is Steve and his wife and his daughter.

First of all, tell us, you stayed overnight. What was it like?

UNIDENTIFIED MALE: There was nothing you could do. There was water surrounding the house.

FEYERICK: Why did you decide -- why did you decide to stick it out?

UNIDENTIFIED MALE: Well, I was actually helping out the community. I'm a volunteer firefighter, and trying to give a helping hand. And we couldn't get out. We got trapped. Even -- you know, can't even help anybody. I couldn't help myself.

FEYERICK: Were there moments where you thought this is it, we're not going to make it out?

UNIDENTIFIED MALE: Absolutely. Absolutely.

FEYERICK: I mean you are clearly shaken by this. The waves, the water, as --

UNIDENTIFIED FEMALE: Yes. Water came inside the house. Came into the basement first and then uncontrollably it started to come up to the first floor. We went up to the second floor. I was hoping maybe it would stop. And it eventually did. And then looking out the window, we saw the fires and we couldn't tell if the fire was 100 yards or a mile away. It's just so bright.

I couldn't tell -- I couldn't tell where it was. We thought we were going to have to go jump in the water. It was terrible.

FEYERICK: You were able to pack up your car. When did you realize you had a window to get out?

UNIDENTIFIED MALE: Well, I put the car on higher ground the day before, obviously. And not until just now. We realized that the car started and -- hundreds if not thousands of cars over here that probably not starting. They were under water. Houses are destroyed. As you say yourself, there's over 50 houses have burned down. So it's unbelievable. It's like a war zone.

FEYERICK: You're going to go to Brooklyn now and you're going to try to figure out -- UNIDENTIFIED MALE: Yes, we're going to stay with some friends and family and see what we can do.

FEYERICK: What is the hardest -- what is the hardest thing for you right now, you and your family?

UNIDENTIFIED MALE: Well, leaving our home. But, I'll be honest -- you know, just getting out here at this point, there's nothing here. You know, a home can always be rebuilt, we only have our lives and we're safe.

FEYERICK: All right. Steve, thank you very much. All right. Take care. Thanks for stopping for us.

And so you can -- you can see just how shaken people are. There were a couple of people who -- they wanted to ride out the storm. And we asked them why, and they said, well, they were going to pump out their basement, they could stay ahead of the water. But what ended up happening is that once the water came in, it came so fast and it was so powerful that it knocked out all electricity so the generators couldn't work. And by that point, that was sort of the moment when they realized that there was going to be no way out.

We were trying to get down to those homes, 50 homes that were burned to the ground. Take a look. This is just some of the devastation here. We're seeing just patios that were ripped up. Furniture everywhere. There are trees that have jammed themselves under cars. And this is all we're seeing. The water, we were walking down in places knee-high, just boulevard or street after street after street. Because the homes are so close to one another.

Right now, a lot of these people, they say, look, we got out with our lives but this is certainly something that they are not going to forget, not for a very, very long time -- Carol.

COSTELLO: Deb, I want to talk a little about the fires. Because these fires have been burning out of control for much of the morning. Why are the firefighters having so many problems putting these flames out?

FEYERICK: Yes. And Carol, I'm hearing bits and pieces of your question. But let me tell you what I do know about these fires. You know, the homes are wooden. They're very, very old. What we understand happen in some cases, wires came down, ignited some fires. But also once the homes flooded, what we're hearing is that the electrical boxes -- people left without turning them off. So once those got under water, you had sort of surges and there were fires.

And again, these are what we're being told about people who are riding this out. There were 200 firefighters. This became a six-alarm blaze. One man described it like the World War II, the blitz, just truck after truck, and the flames so huge and so big. Imagine more than 50 homes that have completely burned to the ground. So an area that really got hit hard.

And ironically, I mean, you can feel right now the wind that's coming. I'll tell you, 40 minutes ago, Carol, we saw the most magnificent rainbow that just physically framed this area. So maybe it's a sign.

COSTELLO: Wow.

FEYERICK: Who knows. But anyway, we'll keep you updated from here -- Carol.

COSTELLO: I hope it's a sign. Thanks for leaving us with a little bit of light at the end of the tunnel. Deb Feyerick reporting live in Queens for us this morning.

We want to head back to New Jersey, to Moonachie, because there's been some sort of breakage in a dam, a levee or a berm. We've heard all three terms.

Joining us right now is Jeanne Baratta. She's the chief of staff at Bergen County.

And Jeanne, first of all tell us exactly what broke in New Jersey.

JEANNE BARATTA, CHIEF OF STAFF, BERGEN COUNTY: Well, at this time we're really not sure what broke, whether it was a problem with a levee or if it was just because of the surge of the tide that was all over New Jersey and New York that could have just pushed that water over that levee in Moonachie.

And what we're seeing now are the three towns that have just been devastated. The town of Moonachie, the town of Little Ferry and the town of Carlstadt. And some of the other towns but not so much. Within a half an hour, and this happened after midnight last night, a surge of water rushed into those towns. The town of Moonachie, every single street in Moonachie was covered with five to seven to eight feet of water. It's just devastating for them.

COSTELLO: We also heard word of people on top of their homes on roofs, waiting to get rescued.

BARATTA: Yes. We've got an area of Moonachie that houses a trailer park. We've had people going up to their second floor of their two- family homes. But yes, we have people on the roofs and we were doing water rescues. We've been doing them since 2:30 this morning and we continue to do it. We're lucky, we've got resources from the state. We've got the National Guard here, we have the state police. We have our Bergen County Police Department, Sheriff's Department and all the municipalities in Bergen County have been giving their assets, boats.

We need large trucks that can go through that high water. And everybody should just comes together. And we're all praying for the people in those towns.

COSTELLO: It's great to hear. You know, Americans draw together in times of need. I love that about this country.

The cold must complicate this for rescue workers, though, because they're already wet. It's sort of still drizzling. Lots of water. I just can't imagine how miserable they must be. BARATTA: You know what? The rescue workers, they're phenomenal. I mean they're pulling together. We've got another group coming in from Virginia that's going to take over later this afternoon. They're working for a common goal. These are our neighbors. And we're working to get them --

COSTELLO: Jeanne, we're losing you. I think we lost the connection. Jeanne, can you still hear me? OK. She's gone. But you heard what's going on in Moonachie, and Little Ferry and Carlstadt in New Jersey. A breach in a levee maybe. But something called a huge -- caused a huge surge of water. Every street in the town of Moonachie flooded this morning.

And as you heard Jeanne Baratta, the chief of staff in Bergen County, telling you, there were rescue workers coming in to Virginia to help. Everybody is drawn together. And so far we've heard of no loss of life. And that's the best news about that area this morning.

Massive flooding and a 90 percent power loss at NYU Medical Center sent staff members and police rushing to evacuate more than 200 patients early this morning. That picture is so touching. Nurses had to help babies from the ICU, the intensive care unit, breathe as they carried them down the stairs because the elevators went out. They had no electricity. In some places flashlights were the only lights hospital workers had to get all of those incredibly sick people out.

They're trying to effort someone from the hospital to tell me if things are up and running. If we get someone on the line, of course, we'll share the information with you.

It was a scary night along the Jersey shore. Now with the morning light we're able to see the first signs of destruction. Rob Marciano is in Asbury Park.

What do things look like this morning, Rob?

ROB MARCIANO, AMS METEOROLOGIST: Well, Carol, it's hard to believe that we just hit high tide and the water is as far back as it is compared to where it was last night. There you see (INAUDIBLE) trying to break through. Not a bad looking morning when you just look out on the ocean. But we're standing on the boardwalk, which has sustained some damage.

Some ramps and staircases actually were thrown up on the boardwalk. Watch yourself here. These holes, these are kind of -- these are all around the boardwalk. They're actually built, I assume, to kind of pop up when the pressure gets too bad because the water certainly was coming under here, it was going over the top of this boardwalk as well, and up against what was, back in the day -- you better believe -- were some restaurants, maybe some candy shops and souvenir shops.

This area, that's been used for storage for the past -- I don't know how many years. And a couple of people that we've talked have almost said, you know what, maybe this is -- as bad as it looks right now, maybe it's a small blessing in some cases, insurance money might be able to do a little something better here, get this thing going as far as Asbury Park is concerned.

So the water came last night, obviously hit these areas. And in many cases, just funneled down these sidewalks and barreled into town. Taking with it rocks, soil, all sorts of debris. These roadways are absolutely littered with not only debris from the beach, from the ocean, from the stores, from the sidewalks, but a lot of these street lamps have gone down. There's windows that are blown out all over the place. And still, flooded roadways covering up a lot of this debris. So officials obviously urging people not to go out. Not to drive around. Because we've got still some power lines down. Gas companies are now trying to shut off gas because we don't need more fires around. But it's going to take some time for these floodwaters to recede.

Couple of notes of importance. There are -- there were two groups of senior citizens in nursing homes, basically, that did not evacuate. They're basically stranded without power, neither has a backup generators, but they're all OK. No serious injuries or fatalities to report from Asbury Park. But you better believe it, coastal communities up and down the Jersey shore look like this. And it's going to take a long, long time to pick up the pieces and put things back together and recover from Hurricane Sandy -- Carol.

COSTELLO: I think you're right about that. Rob Marciano, reporting live from Asbury Park, New Jersey, this morning.

Millions of people are hoping for some sunshine. Please make the sun come out. I think they're going to have to wait for a while.

Alexandra Steele is tracking the superstorm. Deb Feyerick said she saw a rainbow. We're hoping that means good things?

ALEXANDRA STEELE, AMS METEOROLOGIST: That does. Well, things are only on the improve. You know, we've seen the devastation of the superstorm, Carol. The flood and the fires.

Meteorologically the most important thing now, where is this going. Right? So there's two numbers up here. They're both going down. One is a good thing and the other is not. Right now it's moving west- northwest at 15 miles per hour. That is coming down. And that is not a good thing. This storm expected to weaken but is expected to slow down.

The winds now maximum sustained winds at 65. So still potent, no doubt. But those winds are coming down because it will weaken. Center of circulation right now, you can barely see it right there, it's about 90 miles west of Philadelphia.

So where is this going? Again, right now it's moving at 15 miles per hour. That expectation will flow.

Here it is. Can you believe the energy of this superstorm? Eastern -- portions of it, of course, the hurricane, the tropical elements, nine inches of rain in Delaware. Western portions, that cold portion, more of a nor'easter, nine inches of snow at least in West Virginia, and expecting potentially another foot. There's the rain and the snow that is still happening. Here is the movement. So right now you can see Tuesday morning, here's the center of low pressure. By tonight we're going to see it move and be in only western New York. And then by tomorrow, it moves from western Pennsylvania just -- you can see just west of New York around Toronto. So very slow to move. So even by Wednesday and into Thursday, New York and Washington have 25 and 35-mile-per-hour wind gusts. So still a potent storm. So the difficulty with this destruction, trying to clean up. This hurricane did not come in and go with certainly not a one-day quick hitter. We will still be doling with it as we head from Thursday and even into Friday.

Gusts like this in the 90s, from Islip to Sandy Hook, certainly, Carol, are not the picture anymore. But still, 50s and 60s today and then dropping, maybe 10 to 15 miles per hour as we head to the next few days. We're talking Friday still, 35-mile-per-hour wind gusts from Washington to New York City.

COSTELO: It's a whole lot of misery for a long time.

STEELE: Yes. By the weekend, finally, it will be in Canada and really clearing up.

COSTELLO: Thank goodness. But poor Canada.

STEELE: O Canada.

COSTELLO: O Canada. Thank you, Alexandra.

You heard Alexandra mentioned the snowfall in West Virginia. Well, we're going to take you to West Virginia. You won't believe it.

(COMMERCIAL BREAK)

COSTELLO: Our iReporters have been a virtual army of information for us. This video was from Rilwan Akinola. It was taken Monday in Queens. You can see, it shows the very flooded streets near Rockaway Beach.

Things are better this morning. They're improving, but things are still pretty bad.

Super storm Sandy. Today's kids will one day tell their grandchildren about history being made as we speak. The destruction hard to even fathom, power outages in 13 states. This morning, 7 million homes and businesses without electricity or heat. Hurricane force winds ripped into the eastern corridor, the most populated chunk of the country.

Even today, fierce winds are blowing from Georgia all the way to Canada. At least 16 people are dead and floodwaters have paralyzed much of the east.

In New York, airports, bridges, subways all closed. The disaster shaping up to be one of the worst in U.S. history.

Sandy has also spawned a blizzard that could blanket parts of West Virginia with up to three feet of snow. Looks pretty, doesn't it? But, boy, can it be dangerous. This is heavy, wet snow.

Martin Savidge is in Kingwood, West Virginia, where there's a blizzard, flooding and high wind warning in effect all at the same time.

That's crazy, Martin.

MARTIN SAVIDGE, CNN CORRESPONDENT: It is, Carol. Trifecta really. Hey, look at this. It's a beautiful, almost Christmas postcard kind of scene, which wouldn't be bad if it wasn't for the fact that this is the day before Halloween.

You can see the snow has piled up pretty heavy here. Temperature: 33 degrees. That is the optimum temperature for heavy snowfall. That is exactly what they're getting in the higher elevations of West Virginia.

This is Sandy. And, of course, it's vastly different from what many people saw along the coastline. Up here in the mountains, it is a blizzard and it's going to remain this way, we're told, all the way through today and into tomorrow afternoon.

We got about eight inches to a foot here. They anticipate another foot, maybe two will come down. Power is out to this area. There are now 12 counties that are under a blizzard warning.

You mentioned the flood warning. And then on top of that, the high wind warning. Wind blowing up in the trees. To get here today, the drive was a white knuckle drive on highway seven. We should also point out that the main interstate, 68, still closed. But they're making progress in trying to get it open.

But the conditions really, Carol, just miserable out here -- cold, windy and very treacherous on the road -- Carol.

COSTELLO: It makes me concerned about power outages. That snow is really heavy. There's also a howling wind. Any word about how many people are without power in West Virginia this morning?

SAVIDGE: Right now, the number relatively low, compared to, say, other states. Two hundred thousand people without power. But you're exactly right. The more that the snow comes down -- and this is the really thick, heavy stuff. It's going to drag down the tree limbs. We already saw that while we were driving. A tree exploded above us, came showering down with branches. No power lines there. But had there been, would have dragged them down.

As we say, right here there is no electricity. We don't know exactly the cause, whether it's wind or power lines down. But it's going to be a problem that will only get worse throughout the day -- Carol.

COSTELLO: You look so cold, Martin. Thank you very much. We appreciate it.

SAVIDGE: Yes.

COSTELLO: Poor Martin.

The Blue Ridge Mountains of North Carolina also going to get hit by snow from superstorm Sandy. Classes closed at many public school schools and colleges this morning.

North Carolina's governor, Beverly Perdue, declared a state of emergency for 24 counties because of the snow.

Snow is being blown by very strong winds, you heard Martin describing that, decreasing visibility, shaking vehicles. Salt trucks are out in force, trying to get the roads clear. It will be a big job this morning.

Our live coverage of the effects of Sandy continues after a quick break.

(COMMERCIAL BREAK)

COSTELLO: Power outages are crippling many areas. From Virginia, to Maine, 7 million customers without power across 13 states and the District of Columbia. Almost 2 million of them are in New York state.

Alison Kosik is in our New York. She's looking over kind of depressing numbers this morning.

Good morning, Alison.

Oh, we're having audio problems. We're going to get back to Alison as soon as we get that technical glitch worked out.

If you still have any doubts about Sandy's power, though, take a minute and take a look at this picture. Here it is.

You see this. Is that incredible or what? It's a huge tanker. It's sitting on the shore of Staten Island. Listen to WABC reporter Michelle Charles described the situation.

(BEGIN VIDEO CLIP)

MICHELLE CHARLESWORTH, WABC: This is a giant, 160-foot, 700-ton tanker that was just picked up by the narrows and dumped here on Front Street. We are on Front Street in Staten Island.

And if I show you -- this is the narrows here. You can see the water coming in. There's Lower Manhattan. And then we swing around to show Brooklyn. This is the Verrazano-Narrows Bridge.

Now, this tanker came from about a mile away from a marina that has just been chopped to bits.

(END VIDEO CLIP)

COSTELLO: Just unbelievable. Just an unbelievable picture. Lot of strange pictures like that after intense flooding and strong hurricane force winds. We'll be showing you more of these, unfortunately, throughout the hour. OK. We got our technical glitch worked out. Let's go back to Alison Kosik and talk about power outages.

Good morning.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: No power outage here but definitely around our area. You know, the power went even, Carol, at NYU's Langone Medical Center.

Listen to this, the backup power failed at this hospital. Two hundred patients, they have to be evacuated. Four newborns in the neonatal care unit -- they were on respirators. They went down. Nurses had to use manual pumps to keep them breathing.

Now, during this storm overall, we did see flashes of several transformers blowing throughout New York. At this moment, probably because of what you're seeing there, much of Lower Manhattan is dark right now.

Con Ed is saying this is the biggest snow-related -- storm-related outage, rather, in our history. It's not just New York. If you look at this, as we were saying, about 2 million people in New York, it was really New Jersey where Sandy made landfall, where more than 2 million people are without power.

In Massachusetts even, about 322,000 people are without power. The emergency -- there's an emergency agency in Massachusetts, Carol, that's warning people of dangerous winds today. That 300,000 in Massachusetts, that could go up as far as the number of people without power -- Carol.

COSTELLO: And it's so cold, too.

KOSIK: It is.

COSTELLO: It's not like your normal hurricane where it's hot and humid afterwards. It's more cold and rain.

KOSIK: Yes, exactly.

COSTELLO: Alison Kosik, thanks so much.

Our live coverage of the impact of Sandy continues.

Seven subway tunnels in New York city flooded with water. It's going to take four days to pump it all out. Can you say nightmare?

(COMMERCIAL BREAK)

COSTELLO: OK. Some pretty disgusting pictures. These are the kinds of things that happened after a major storm. This is according to the Maryland Emergency Management Department.

There's a sewage discharge coming from Little Patuxent Water Reclamation Plant. This is in Howard County in Maryland. That's where Columbia, Maryland, is, between Washington, D.C. and Baltimore. Look at that truck. It's buried in raw sewage, at least partially buried. They're having a horrible time containing this because, of course, they're dealing with power outages, too, and lots and lots of water and saturated ground. But you can see that this sewage leak is contaminating not only bodies of water but also the ground surrounding the sewage treatment plant.

Again, this is Howard County, Maryland. That's near Columbia, where Columbia, Maryland, is. That's between Washington, D.C. and Baltimore.

When we get more information on this terrible and kind of disgusting story, we pass it along to you.

Sandy left Manhattan's Battery Park with a record tide. There's a video timeline starting more than 24 hours. So, you can so how the storm surge came up, for the nearly 14-foot tide shatter the previous high mark from hurricane Donna back in 1960.

That's our John Berman. He was in Battery Park. There's Ashleigh Banfield.

But John Berman is there in the cold light of day.

What's happening today, John?

JOHN BERMAN, CO-ANCHOR, CNN'S EARLY START: Hey, Carol. Right now, it's dry. As you said, there was water covering this whole area where I'm standing right now was a 14-foot storm surge, four feet higher than the record before. And, you know, we heard out there in New York harbor, there were waves that were 32 feet high. And that's six feet higher than the record has ever been.

New York is just simply battered. That storm surge wreaked havoc all over the city. You were talking about it a little while ago.

The subways flooded, seven tunnels, seven subway tunnels that go out from Manhattan, into Queens, and other areas here, they're flooded. They haven't said how long it will take to fix them. A subway official said it's the biggest devastation he's seen the worst devastation he's seen or they've had in the subway system in its full 108-year history.

No word on how long it will take to pump the water out of those tunnels. They could get some lines running up before others. But those tunnels out in the rivers, they will be tough to repair. Meanwhile, some power out for about 250,000 people in Manhattan alone. They shut down the power after a transformer explosion.

So, Lower Manhattan from the 20s on down was completely dark when I drove down here at night. it was very eerie. Never seen anything like it here in Manhattan.

And one other story to tell you about, some very dramatic pictures over at NYU Langone Medical Center on the other side of town. They lost power, they backup generator stopped working. They had to evacuate 260 patients from that hospital, including several babies from the NICU, from neonatal care unit.

The nurses actually had to carry the babies down the stairs and use a hand pump to keep them on the respirator, because they had been hooked up to a respirator on power. They used a hand pump carrying them down the stairs. They transferred them to other hospitals. About 1,000 people involved in that evacuation.

This city really overnight was like nothing no one has ever seen -- Carol.

COSTELLO: And just this hospital situation. You know, it's not just a couple of floors. It's -- I know it has more than 12 floors at NYU. Do we know if the hospital is open again this morning, John?

BERMAN: I don't believe it is. I have not received an update from that hospital yet today. It's 15 floors. And they had to evacuate. There were 216 patients left in it. It has the capacity of about 800 patients.

And they had moved a lot of patients over the last few days with the storm heading in. But the ones in the most critical care were kept in there. They thought the generators would work.

They didn't think the flooding would get that bad. Of course, it did. And they had to evacuate overnight.

COSTELLO: I know. And the hospital is right near the water. So, you can se how that happened.

John Berman, thanks.

Mayor Bloomberg, the mayor of New York, is expected to update us on the situation in Queens where 50 homes burned down. They're still fighting fires there.

And also the hundreds of thousands of people without power in the New York area. We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: More pictures to show you from our team of iReporters. This from Shahir Daud. This is what it looked like on Monday night at pretty much the height of Sandy. That's the superstorm blowing through the streets of Manhattan.

As we've been telling you, high winds, heavy rain, hundreds of thousands of people without power in New York City this morning.

There's also been a breach in a berm in New Jersey. And several communities are now even more flooded. That's just the latest after the Atlantic City boardwalk collapse.

CNN's Ali Velshi is live in Atlantic City.

And this boardwalk is the backbone of the city. ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes. Most of the boardwalk is intact, about a 50-foot length of it actually got hit last night. Not a lot of overnight damage.

The wind is still blowing here. You can hear sirens around me. This just blew over to me. This is one of the hoods from the traffic lights, a lot of this kind of stuff around the city, you know, newspaper boxes, garbage pails.

I just went over to the boardwalk, drove across it, again not extensive damage over there. There are at least 500 people in shelters, though. I just spoke to somebody from the Red Cross who says they're expecting more people in the area, 11,000 people, they say, spent the night in shelters but more people are doing so now because they're finding out that this flooding and power loss is serious.

Here in Atlantic City, we have a staging area for two things, National Guard troops. We saw them. They were staged up here and they left at 7:00 this morning. We've been seeing them all around town.

And there are convoys of ambulances that were also staged here and went out. Many of them, actually, from the state of Indiana, coming in to help out.

They're going to go to the outer areas. There do not seem to be a great deal of -- there doesn't seem to be a great deal of call for them in Atlantic city. Most people understood there was a traffic ban and curfew from 6:00 p.m. last night. So, those who were able to get out did.

Carol, you probably heard the spat that's going on between New Jersey Governor Chris Christie and the mayor of Atlantic City. The governor says the mayor didn't do enough to get people to take it seriously about leaving.

But the bottom line is that the water is all gone. This is where I was standing yesterday. This was waist deep at one point. The water has receded, still a lot of flooding.

And we are seeing a number of Coast Guard overflies that started again at first light this morning around 7:00 am. And they're doing an evaluation of whether or not there need to be rescues. We've not heard of active search and rescues. But they are evaluating flooding, seeing who needs help.

Again, behind me, you're hearing sirens. Just so you know, Carol, that's the boardwalk behind me. It's about three-quarters of a mile down.

You can see those red lights. Mostly just emergency vehicles around town. No serious damage. There are power outages here in Atlantic City, Carol.

COSTELLO: I'm sure. Ali Velshi reporting live from Atlantic City, New Jersey. We've been telling you all morning long about a breach in a levee in New Jersey that has flooded at least four towns. Rescue workers are doing their best to get people out of their homes. But the flood water is very deep right now.

We're going to talk to the chief of police from Little Ferry when we come back.

(COMMERCIAL BREAK)

COSTELLO: It is 45 minutes past the hour.

Super storm Sandy, today's kids will one day tell their grandchildren about the history being written as we speak, the destruction hardly even fathomed. Power outages in 13 states and this morning seven million homes and businesses are without electricity or heat.

Hurricane force winds ripped the eastern corridor, the most populated chunk of the country. Even today fierce winds are blowing from Georgia all the way up into Canada. At least 16 people are dead and floodwaters have paralyzed much of the East. In New York, airports, bridges, subways remain closed. The disaster already shaping up to be one of the worst in history.

We've been telling you about what we think is a breach in a levee in northern New Jersey. This is taking place nine miles northwest of Manhattan in Bergen County, New Jersey, that's right along the Hackensack River. We have the police chief of Little Ferry, one of the towns affected by this. His name is Ralph Verdi. Chief Verdi, thank you for joining us this morning.

RALPH VERDI, LITTLE FERRY, NEW JERSEY POLICE: Yes, ma'am.

COSTELLO: Do you know what caused this breach?

VERDI: At this time, ma'am, we're unsure. All that we know is I believe it was around 11:00 p.m. last night. A rush of water just took over us. We had a shelter set up, we had to evacuate people from that shelter. We had to bring them into our Borough Hall which again began to flood. We contacted the county estate OEM and we had a shelter opened up in Teterboro at the Bergen County Vocational Technical High School

We then took our residents there, they opened a shelter for us, we had the people there. We've been evacuating people all night. We continue evacuating people from our apartment complexes and whatnot along with any emergency aid calls.

Again, I've been a police officer 33 years. I've never seen this type of devastation from -- from flooding. We have had floods in the past but nothing -- nothing like this.

COSTELLO: How deep is the water, sir?

VERDI: We -- we have water in some spots in town six to eight feet. We have people that were actually on the roofs of their homes in certain sections. We needed actually boats. We're still using boats to get people out of low-lying areas.

(CROSSTALK)

COSTELLO: How many people are you talking about?

VERDI: We -- we -- approximately 75 percent of our town. We're a municipality of about 11,000 people, about 75 percent of the town is still under water. It has receded somewhat -- very little, but it has receded somewhat. We're right now we're just -- we are contacting the Army Corps of Engineers and hoping to get some answers from them as far as what we can do with this levee.

COSTELLO: Do you have enough -- do you have enough boats?

VERDI: Yes, ma'am. We've had -- we placed mutual aid and we have boats from the Richfield fire, Little Ferry Fire Department has three boats. Pagoda, Bergen County Police, Bergen County Sheriff, Warlington (ph), I'm probably missing a few. But Marla (ph), Fairlawn (ph) and the state police so we -- we have plenty of boats now. When it first happened we were over -- over swamped with it. But we kept up as best we could and we got mutual aid in here to help us out.

COSTELLO: I'm just curious. How many hours have you been working?

VERDI: I'm probably going on 28.

COSTELLO: Wow. Well, that's incredible. But I'm sure people sure appreciate it. You're just talking about Little Ferry. But there are two other towns involved, Moonachie and Carlstadt.

VERDI: Yes.

COSTELLO: So in your mind, how many people, how many homes are we talking about that have been affected by this breach?

VERDI: In Carlstadt, I couldn't tell you. I know Moonachie is a town of about 3,000 people. I know their police station was evacuated they have no officers in their police station. The municipal building has been totally evacuated.

In Moonachie I understand the devastation is pretty -- pretty bad also. I believe Carlstadt is more an industrial section, I don't -- I don't think they got hurt as bad, quite as bad as Moonachie and Little Ferry.

But at this point I couldn't even tell you. I couldn't even get in contact with the Moonachie police chief.

COSTELLO: Oh did a lot of people already evacuate? Are you finding that there are people in pretty much every home in Little Ferry?

VERDI: No, ma'am. We were prepared. People have sand bags. We knew this was going to be a very bad storm. But again, once that that levee went, it was a -- it was a wall of water that came from the southern portion of the borough and it just washed right through. It -- it was like something we've never seen. COSTELLO: So -- so you thought that oh, the worst of the storm is over and then this happened?

VERDI: Pretty -- yes, pretty much. Pretty much.

COSTELLO: Well, I'll let you go. I know you're busy and tired but we appreciate your efforts. Thank you so much Chief Verdi for joining us this morning.

VERDI: Thank you. Take care.

COSTELLO: Oh -- our best to all those people. It's just -- well, we'll be right back.

(COMMERCIAL BREAK)

COSTELLO: Homeowners who evacuated before Sandy came ashore might return to find damage and possibly a second shock when they look at their insurance policy.

Christine Romans is here with what could be a lousy October surprise, even worse than the storm.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well look, you thought your deductible was about what $500, $1,000, $5,000 -- Carol, maybe not. Check the first page of the insurance policy to find out if the hurricane deductible is one percent to five percent of the value of your home.

After Hurricane Andrew in 1992 insurance companies Carol put in clauses that trigger higher deductibles if a storm makes landfall as a hurricane. It varies by state, it varies by insurance company, how far are you are away from the coast? But generally you end up paying more out of pocket on your -- on your house if it were slammed by a hail storm than -- than by a -- by a hurricane, rather, than a hail storm or regular thunderstorm Carol.

This is an example. Let me show you. The typical $300,000 house with a $500 standard deductible could have a hurricane deductible of up to five percent of the value of the home. That means the out of pocket cost is not $500 but $15,000.

18 states and D.C. have these hurricane deductibles. Some policies call them tropical cyclone deductibles. Every state hit by Sandy has them. You can look on the first page, the declarations part of your insurance policy to find out.

That car you're seeing right there, that will be covered by your car insurance; but when a tree hits the house, that's the homeowner's insurance that kicks in.

Also a reminder, you're looking at a roof there. Insurance adjusters are waiting to come into the area today and tomorrow to get started. You will see them soon. You should be present when they inspect the property and keep detailed notes and also, Carol, this is prime time for scammers. You're going -- anybody who shows up who you don't know knocking on the front door asking for cash to do work, don't do it.

COSTELLO: You know I was just thinking through your report of these poor people in Queens who have lost their homes, they've burned to the ground. Would that be a result of the hurricane or fire or what?

ROMANS: They're going to have to talk to their insurance agents right away to figure out how they're going to classify that. If it's a hurricane that caused the wind that caused the fire, I mean that could be -- could come under the hurricane part of the clause. You have to check every single policy to be very, very careful.

The other thing here, too, Carol is that flood insurance. Remember, floods -- that comes in a separate insurance policy. Very important to check that as well. You need 30 days to put that into effect. That's not something you could have gotten last week even.

COSTELLO: Wow. Christine Romans thanks so much, I think anyway, but good advice.

ROMANS: Welcome.

COSTELLO: Our live coverage of super storm Sandy continues right after this.

(COMMERCIAL BREAK)

COSTELLO: Another iReport -- actually, we're going to start with this story. This morning, the captain of a submerged ship still missing. The HMS Bounty was trying to flee Sandy on Monday morning when it began taking on water off the coast of North Carolina. The crew abandoned ship and the Coast Guard was called in to save the crew.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Were you nervous going in there?

LT. JANE PENA, U.S. COAST GUARD CO-PILOT: I was. I hadn't seen anything like this before. This was the first case that I had been into a hurricane.

The waves were just sort of tossed in this way and that way. 50 knot winds. Visibility was still pretty poor.

UNIDENTIFIED MALE: The first guy we pulled, he was really happy to see us, that's for sure.

UNIDENTIFIED MALE: First survivors coming out of the raft.

(END VIDEO CLIP)

COSTELLO: 14 crew members were rescued by the Coast Guard but one person died.