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With all of the storm damage from Sandy, people are already beginning to wonder who is going to pay for all of this. Over the coming days, tens of thousands of homeowners will be calling up their insurance companies. They will file billions of dollars in claims. Robert Smith from our Planet Money team takes us to one devastated neighborhood in Queens, New York, where residents are already struggling with how to rebuild.
ROBERT SMITH, BYLINE: If you walk the beach in Belle Harbor, it looks like Hurricane Sandy found a unique way to punish each and every home. Some are crushed. Some have the fronts sliced off. And then there's Jim Angellino's family home. It took a sucker punch right through the middle.
JIM ANGELLINO: The water ran through, so pretty much everything inside is waterlogged. The rear of the house where the glass doors are, all the furniture and everything was pushed towards the front of the house. So it's pretty much a shambles.
SMITH: Angellino is a contractor. And two days after the house got reamed, he hauled out his construction crew and they started to put up a new front side.
(SOUNDBITE OF DRILLING)
SMITH: He hasn't figured what it's going to cost yet. And then he starts to think about all the other homes that stretch for 10 miles on this New York City beach.
ANGELLINO: It's every block, from Breezy Point as far out as Long Beach. It's hundreds if not billions of dollars of damage just in this area. And I can imagine up and down the whole coast.
SMITH: And you've got to wonder where does the money come from.
ANGELLINO: Yeah, exactly. It's got to be - I can't imagine the dollars involved.
SMITH: Economists have started to imagine it. One firm estimates the total damages of Hurricane Sandy at $20 billion - $20 Billion. And there's only really three places that money can come from - Insurance companies, the U.S. government and out of the homeowner's pocket.
A simple walk up the beach demonstrates how complicated this is going to get. I spotted Jerry Freed, who was looking out from what used to be a wall. Now the front of his house is one big hole.
JERRY FREED: I'm waiting for my insurance inspector to come down.
SMITH: Do you think your insurance will cover most of this? Any of this?
FREED: No. No.
ANGELLINO: Why not?
FREED: It'll cover part of it, but not all of it. Who's going to pay for rebuilding the house?
SMITH: And that's the first problem many of these homeowners are going to face. They have an insurance policy that pays out a specific amount. But it doesn't cover the whole cost of rebuilding. In fact, economists estimate that only half of the total losses from Hurricane Sandy will be insured and paid out. It will be tempting for homeowners to just take the money they do get and walk away from the rubble. But not Jerry Freed.
FREED: I don't intend to sell it. I have prime property over here.
SMITH: But it's tricky. When you look at the fine print of an insurance contract, you'll find that not all damage is created equal. Hurricane Insurance usually covers the effects of hurricane winds or if something like a tree falls on the house. But flooding, the kind we got with Hurricane Sandy, that's almost never included. And here in Belle Harbor, the houses clearly have both kinds of problems.
I ran into Andre Cadet. Sandy's big gift for him was a basement full of water. It covered up his professional darkroom, his collection of exercise machines and his careful renovations.
ANDRE CADET: My estimate for everything that I did was 75,000 to 80,000 American dollars.
SMITH: That is a very expensive basement.
The sad thing is that Cadet really did try to get the best insurance he could.
CADET: The only company that would insure me, because it's a high flood zone, was Travelers. And because it's a high flood zone, no flood insurance.
SMITH: And this is where the government comes in to pay a lot the costs of this storm. The U.S. government offers flood insurance to make up for the reticence in the private sector. And Cadet was lucky. He signed up and has already filed a claim with FEMA.
But not everyone here is waiting for insurance decisions. Around the corner from Cadet, Pat Klein has an army of workers already rebuilding his home.
PAT KLEIN: You know what our work crew is? It's family.
SMITH: Yeah, Klein has enlisted all of his relatives, many of them, like him, are firefighters. Big burly guys hauling wood back and forth. Klein's paying for the materials out of his own pocket. Whether he gets an insurance check in the end or not, Klein says firefighters like to take control.
KLEIN: This is my house, and it's torn apart. But I've got to take the salvation that I have my family left and we can always rebuild.
SMITH: No matter who picks up the check in the end.
Robert Smith, NPR News, New York. Transcript provided by NPR, Copyright National Public Radio.