Litany of Disasters
As discussed in “Bridge Disasters—Collapse and Chaos,” (Claims Magazine, March 2006), bridges collapse for a variety of reasons. Considering the number of bridges on the nation's highways and interstates, it is a miracle that more catastrophes have not occurred. Some states seem to have more than their share of losses. On Oct. 27, 2009, two tension rods on the San Francisco-Oakland Bay Bridge gave way, injuring one person. And the same bridge was badly damaged in the Oct. 17, 1989 earthquake when one of the upper spans collapsed to the lower span, killing one person, while on the Oakland Freeway 42 people were killed by the collapse of the upper span of the dual-span highway, which crushed cars beneath it. Many of the bridge collapses have been the result of a natural event such as flooding or earthquake, but an equal number have been the result of heavy trucks or tanker accidents and poor maintenance.

According to the U.S. Department of Transportation there are more than 500,000 tractor-trailer (18-wheelers) accidents on the nation's highways and interstates annually. Statistics reported by the Insurance Institute for Highway Safety show that someone is killed or injured in a truck-related accident about every 16 minutes, with little fluctuation from around 5,000 vehicle fatalities annually during the last decade. As trucking is a $600+ billion industry, where time is crucial, the impact of trucks on highways will not soon abate. Look at every multi-vehicle fatal wreck—almost without exception a large truck will be involved. Adjusters need to be prepared for the resulting claims. While the truck is not always the party at fault, speed and following too closely behind other vehicles is often a factor in such pile-ups.

On July 15, 2009, one person was injured in the collapse of the Hazel Park Bridge in Michigan due to a tanker accident, and a similar tanker accident led to an injury in the MacArthur Maze of Oakland, Calif., on April 29, 2007. Heavy trucks or tanker fires collapsed bridges in Oakville, Wash., on Aug. 15, 2007 as well as the I-95 overpass in Bridgeport, Conn., on March 26, 2004 (with another collapse killing one during bridge construction in February of 2004 on the Sikorsky Memorial Bridge in Connecticut).

River barges or ships have caused bridge collapses in a number of cases (several cited in the March 2006 article, such as the Sunshine Skyway and the Lake Pontchartrain Causeway) including the collapse of the I-40 bridge over the Arkansas River in Oklahoma on May 26, 2002 (killing 14) and the Port Isabella Bridge in Texas on Sept. 15, 2001 (killing eight)—four days after the Sept. 11, 2001 disasters.

Structural Failures
Some of the worst or most notorious highway bridge collapses have been due to structural failures, such as the I-35W bridge over the Mississippi River in Minneapolis that collapsed on Aug. 1, 2007, killing 13 and injuring 145; or the I-5 bridge collapse in Coalinga, Calif., on March 10, 1995, when, as with the Hatchie River bridge collapse in Tennessee that killed eight, the bridge structure was weakened by heavy rainfall. Bridges in California are subject to collapse in strong earthquakes, as occurred in the Northridge Quake in 1994. But bridges should be designed to withstand the floods, earthquakes, and even gasoline tanker fires that have caused so many collapses.

Bridges have been built and have collapsed since ancient times, but many built by ancient empires still stand, and some Roman bridges are still in use. It was simply too much traffic that finally weakened and collapsed the Hoan Bridge in Milwaukee on Dec. 13, 2000, but fortunately no one was injured. The loss of use of a major urban bridge, however, can create indirect loss for many businesses and individuals. Highways are generally not insured, although if highway pavement is damaged in an accident, the negligent parties may receive a bill from the state. Bridges and tunnels, however, can be insured, usually in inland-marine forms as they are instruments of transportation.

Bridge inspection has to be a major part of pre-loss risk control of the nation's infrastructure. This is part of what the Obama administration was suggesting for years prior to the 2012 election as a way to stimulate the economy: find bridges and highways in need of repair or replacement—and do it. Congress, unfortunately, did not agree that this was the way out of the economic slump, and the economy remained weak.

States Can Lead the Way
States often take the lead in highway construction and maintenance, much to their credit, and often state or U.S. highways are far better and less traveled than interstates. In annual treks between Atlanta and Tampa we use U.S. 19, a four-lane highway that parallels Interstate 75. I-75 is jammed with trucks and tourists; one can drive for hours on U.S. 19 and never see a truck, plus it is a more scenic route. On our recent Northeastern journey we used U.S. and state highways that were four lanes, well paved and totally empty of all but local town traffic. While we could not go 70 mph as on an interstate, we avoided the pressure of dodging trucks and traffic blockages due to accidents or road reconstruction.

But the joy of such luxurious back-road travel is not universal in all states. There are a few where the roads are full of potholes, the cops look for anyone traveling two miles over the limit (which they may deliberately set at 35 or 45 mph on a rural four-lane stretch), but the gas is cheaper because the state gasoline tax is lower. New York and California have the highest gas taxes—California at $.486 and N.Y at $.49—but their roads are better. Alaska has zero state gas tax but far fewer roads.

One might wonder why, in many states, the old rural highways are better than the federally supported interstates. After all, isn't a fixed percentage of federal gasoline tax supposed to go to highways and other forms of transportation? The answer may lie in the various state constitutions that allocate the size and make-up of a state's legislature. In many states politicians from rural areas outnumber those from the larger metropolitan areas. In a “good old boy” legislature those pals of the state highway department planners may be able to allocate bigger bucks for their particular districts and outvote the big-city interests in highway construction costs. While that may sound unfair, the same thing happens in Congress: It's the smaller states' senators or representatives who are often the committee chairmen due to seniority and relatively less competition back home.

Other Infrastructure Issues
It is not just roads and bridges that make up the nation's infrastructure. The railroads, including state-funded commuter trains, have billions of dollars invested in their infrastructure, which they must maintain to federal standards at their own costs, as opposed to other forms of competing transportation that pay taxes but use government-built highways or waterways.

Yet it is in the nation's cities and larger towns where infrastructure is most in need of risk management. In many cities the subways and commuter railroads are well over 100 years old, still operating in the tunnels and right-of-ways built in the 1800s. In October's Hurricane Sandy some of New York's subways were flooded, causing millions of dollars in damage. Water systems in some towns are being stretched to the limit as cities expand with population growth and suburban sprawl.

Inner-city metropolitan areas used to be able to depend on property taxes to maintain their sewers, water lines, gas lines and streets, but as the nation's population went from 100 million to over 300 million in less than a century, the wealthier citizens moved out of the urban areas, and the poor moved in, putting stress on systems designed for fewer people and never maintained properly or rebuilt. Once new schools became overcrowded and dilapidated, crime and vandalism took a toll on any standing structure, including abandoned factories and warehouses; city councils were forced to cut fire and police services because of shortfalls in revenue.

Municipal utilities generally cannot afford to rebuild when sewers collapse or water mains break; rather, systems are patched up and the temporary inconvenience is put off for another day—and another breakdown. While New York has received much well-earned praise in this series, New York City may be the exception. Its mayors, Michael Bloomberg, Rudy Giuliani and Ed Kotch, did wonderfully well with the massive urban area they managed, but when one looks beneath the streets the view is a bit stressful. A new water-system tunnel is going to help considerably, but otherwise many of the pipes are 100 years old or older, and water-main breaks are common. The waste collection system is subject to union strikes, and the occasional labor dispute can leave tons of garbage sitting on street corners. The subway system—especially as the sea level rises—is subject to flooding in any heavy rain, shutting down vital means of transport.

Across the Hudson in the urban areas of New Jersey similar infrastructure problems exist. Key projects budgeted at $X end up costing double or triple. Consider the “Big Dig” in Boston that cost many times more than budgeted, took many times longer to complete, and started to collapse in part almost before it was finished. It is a long, complicated tunnel system running from near Logan Airport under the Charles River to downtown Boston, and having recently driven it, I can tell you that it can be a wild and confusing ride. But then, driving in Boston is only for the brave—but it is certainly not “free.” The tunnel toll is high, and there basically is no alternative. Some think a traffic circle is better than a traffic signal where one side stops while the other goes, but for adjusters who handle auto accidents, they are a major source of business.

Risk Control and the Infrastructure
Having driven in every state and every major city (from the infamous I-405 during rush hour in Los Angeles to the streets of Manhattan and Chicago), your Iconoclast finds it amazing that, somehow, perhaps through the mercy of some god of infrastructure or guardian angel, our nation manages to survive. I've also driven in London, Paris, Madrid, and Munich and ridden taxis in Rome—a very scary ride; they are a lot older than American cities and seem to be holding up reasonably well. A number of issues ago, this column suggested some sort of universal service requirement that would take the millions of unemployed youth off the streets and put them to work in places where they were needed, such as infrastructure maintenance.

Undoubtedly such a notion would be a political lead balloon, but at some point there will be an infrastructure disaster and some city or state will lack the funds to recover from it. It nearly occurred in 2012 when blizzards and Sandy hit the Northeast and basically shut it down. Businesses cannot afford that kind of interruption, but no insurer that I know about sells “infrastructure breakdown” coverage. Our world is complicated, and maintaining highways, sewage systems, water supply, and transportation is crucial to the nation's well-being.

On top of the perils of wear and tear, deferred maintenance, storms, floods, and earthquakes, there are the perils of terrorism, either foreign or domestic. It has occurred in Japan and London, and the City of New York is a leader in urban terrorist intelligence. Some sort of disaster is inevitable, whether caused by nature or man. There are also perils of cyberwar. An enemy in Asia or Africa could shut down a transportation, water system, or electrical grid. How does one manage such risk? For local governments, the taxpayer is usually also the insurer. Suppose hackers shut down a 911 call system. Fires occur, and response is delayed. The hacker is traced to a foreign government. Can fire insurers claim the “war exclusion” on buildings that burned down before the 911 system was restored? Five thousand lawyers would have five thousand different opinions.

Mayors and local politicians may not be able to risk manage infrastructure alone. Often there are ethical issues, graft or fraud, special interests, labor disputes, and financial limitations that add to the infrastructure burden. Cities have burned down before; though unlikely, they could again. But fire is the least likely peril that will damage infrastructure beyond repair. It is more likely that rising sea levels, flooding, excessive rainfall that could burst dams on water reservoirs, an earthquake that twists the tracks of commuter rail or subways, or a cyber or terrorist attack will cause a local community to reach the breaking point. Will FEMA or the state step in to help? We saw the answer to that in Hurricane Katrina.

How can one prevent such calamities? How can one finance the tremendous costs that could result? Most politicians campaign on the basis that they will “cut taxes to the bone” without stating—or understanding—where that bone is. As one old Yankee commented to another old Yankee as they sat on a porch overlooking the Connecticut River when it flooded in March of 1936, while houses, covered bridges, and a town hall floated downstream: “By gosh, Fred, taxes are goin' ta be high.”