In the 1930s there were pictures of men lined up at soup kitchens and in bread lines, trying to find food for their families. Our nation was like some third world country of today, where people must walk miles for a handout of grain or a bucket of water in order to survive. The cause may be civil war, as in Darfur; climate change, as in other parts of the world; or simply political mismanagement in places like North Korea. But here at home our poverty is pretty well hidden. We rarely see a photograph such as those that often ran in magazines like Life of men standing in an unemployment line or children outside a hovel, starving to death. We have, we're told, “safety nets.” But the reality is not quite the same in most urban areas. Homeless and unemployed people by the millions are still lining up at soup kitchens in our inner cities, and entire families are living on the streets in absolute and utter poverty. Many live in their old cars. More than 25 million Americans still need the aid of a food bank every year. That's 8.3 percent of us.

For a number of years during the Reagan and Bush I era, this writer, a trained social worker, had the opportunity of managing an inner-city homeless shelter several nights a month. I'd unlock the door in the basement of a church at 5:30 p.m. and usher in thirty men from the cold or rain, those with “tickets” from the previous night first. Some had waited there for hours.

The routine was fairly well organized. The men selected their “pad,” and a few took a quick shower. At 6 p.m. some local church or organization was supposed to show up with the dinner, and assist in serving it. Occasionally the food and servers never arrived, and I'd have to raid the church pantry for cans of this and that to make a stew. We always had enough.

After supper the clothes closet was opened if any of the men needed a new shirt or jeans, socks or underwear, and we'd start the laundry – two big washers and dryers. They'd usually run until well after 1 a.m. Meanwhile the men could read, watch television, help clean up the kitchen and dining area, or talk with me about their problems.

After “lights out” at 10 p.m. I'd make 60 sandwiches. In the morning everyone was up by 6 a.m., fed breakfast, provided a bag with two sandwiches and some fruit, and dispatched to the street by 7 a.m., most heading for the day labor pools. I'd lock up, go home, take a shower, and go to work, coming back two weeks later.

Unemployed, and Unemployable

The homeless men fell into four general categories. One group consisted of unemployed men from elsewhere, often the Rust Belt in the Great Lakes region, who had lost their high-paying union jobs when America's industrial backbone broke. Many were Vietnam vets. Over the years the number of Hispanic migrants arriving each night increased. The second group was the winos and druggies who had simply blown their minds with alcohol or narcotics and were unable to hold anything beyond day labor jobs. The third group was the mental patients, men who in prior decades would have been institutionalized, but who, in the name of misguided liberal generosity, had been dumped on the street to fend for themselves. If they could obtain and would remember to take their medications, they could function reasonably well. But most could not; medicines for mental conditions are expensive; our county medical facilities dole them out very sparingly.

The final group, often as much as a fourth of our thirty men, were the ex-cons, those who had been in prison and, thus, were unemployable. Why? Well, this is where the insurance aspect of this particular tale develops. If the reader has never handled a fidelity bond claim, he or she may be unfamiliar with a particular clause in such documents. For example, consider the Commercial Crime Policy Employee Dishonesty Coverage Form CR 00 01 10 90, Section D. 2. Additional Conditions, reads, “Cancellation As to Any Employee: This insurance is cancelled as to any 'employee' a. Immediately upon discovery by (1) you, or (2) Any of your partners, officers or directors not in collusion with the 'employee': of any dishonest act committed by that 'employee' whether before or after becoming employed by you.”

Blame the Security Industry?

The fastest growing major industry of the 21st century is security. Today no typical employer will consider hiring an employee without obtaining a complete application, resume, and background check, especially if that employer does any type of government work where such checking is required. The idea is to screen out any illegal immigrants, potential terrorists, or someone with a criminal background who might either steal from the employer or from the employer's customers. Hence, given this condition in the fidelity bond, anyone with a criminal record is basically unemployable.

To what extent does this apply? Note that there is no time limit on “any dishonest act.” The condition is “dishonesty,” and that, according to the policy, “mean only dishonest acts committed … with the manifest intent to: (1) cause … loss; and also (2) obtain financial benefit….” Well! Unless committed during a robbery or to hurry the inheritance from rich old Uncle William, “murder” may not fit this definition of a dishonest act, nor does smoking pot. But “shoplifting” does. If a 40-year-old job applicant answers the question “Have you ever been convicted of a crime?” on his or her employment application, “Yes, when I was a teenager I was arrested for stealing a pair of socks from K-Mart and given a suspended sentence,” that person is unbondable, hence unemployable, absent a specific – by name and identity – waiver from the surety.

Other Population Statistics

Forty years ago, claim adjusters were busy with the same types of accidents as today–fall downs, auto wrecks, workplace injuries, burglaries–but now there seem to be so many more that nobody has time to really delve into the facts like we used to. Why is that? The answer is that now there are more of us. That means more stores or places to fall, more autos on the highways colliding (not to mention more miles of highway on which to collide), and more workers doing more and different things. The Census Bureau reports that 27.3 million foreign-born individuals entered the U.S. between 1980 and 2005. Of these, 16.8 million were “authorized,” and 10.5 million were illegal (only 62 percent of them from Mexico.) That's a lot of potential insureds and claimants.

If only half those 300 million own and operate a vehicle, that's a lot of people paying both premiums and gasoline tax. But also according to the Census Bureau, 51 percent of us live in only ten states: California, Florida, Georgia, Illinois, Michigan, New York, New Jersey, Ohio, Pennsylvania, and Texas. Of those, more than half live in suburbs and another 30 percent in cities. Hence, it is easy to see where the concentration of traffic is located, and where alternative means of transportation – regional intercity and commuter high speed rail and urban to suburban rapid transit – are going to become necessary.

Consider that in 1960 there were 3.55 million miles of streets and highways in America. Today there are 3.93 million miles. That's a 10 percent increase. But in 1960 there were only around 75 million vehicles; today there are 237.2 million vehicles on the road, a 316 percent increase, and we average another 4 million added each year.

Our highways, built at far greater expense than rail, are obsolete and gridlocked. With another American arriving or being born every eleven seconds, our highway system cannot keep up. America is only 5 percent of the total world population, but we consume 25 percent of the world's oil, more than Japan, China, Germany, and Russia combined.

Americans travel more than three trillion vehicle-miles a year, according to the Federal Highway Administration. At that rate an extra penny in tax for every ten miles driven would easily pay for the alternative transportation systems needed, as well as taking vehicles off the roads, thus reducing the number of accidents, and the resulting auto insurance premiums. Perhaps then claim adjusters might resort to actually going out and investigating accidents–thus preventing some of the fraud now occurring–as was the case in the 1960s.

Population and Global Warming

Almost all the world's negative situations, including wars, famines, poverty, floods, wildfires, and economic chaos, can be attributed to a combination of expanding global population and global warming. America is not immune from these conditions, and may well be as much a part of the problem as it must be a part of the solution. Our insurance industry can play a major role in controlling these problems, largely through the underwriting process.

For example, as a Florida and a Colorado property owner, this writer does not like the idea that property insurance premiums, especially near the coastline (and more than half of Americans live within fifty miles of a coastline), have gone up by as much as 4000 percent since 2005, depressing the real estate market to practically nothing. Neither do I like the fact that the property tax on my unimproved forested rural land out west has steadily increased due to the costs of wildfire protection. But these factors are ultimately loss-control factors as well. Loss costs are borne by our pocketbooks through insurance premiums and taxes, so if they get too high we may all decide to do something about the losses, like preventing fires or moving from the coastlines.

Americans create 25 percent of the world's carbon dioxide emissions, approximately 20 tons per American, compared with only four tons for people in the rest of the world. Over 40 percent of our rivers and streams are too polluted for fishing or swimming, and the world's fish supply is dwindling to near nothing. Nearly seven thousand plant and animal species are at risk of extinction in the United States. Still, we fill in our wetlands, build in our wildlands and forests, and sop up the electricity produced in coal-fired utility plants.

I'm always thankful when I see little kids being hauled to school by their parents. But I don't envy those kids the world I've helped to create and do my share of destroying. Hopefully those kids will figure it all out better than their parents and grandparents have, and can re-create a world that is stable, unpolluted, and safe.

Ken Brownlee, CPCU, is a former adjuster and risk manager, based in Atlanta, Ga. He now authors and edits claim-adjusting textbooks.