When traveling by car between states it becomes clearalmost immediately which of those states invest heavily in theirroads and which spend the tax dollars in some other way. When onegoes “bumpity bang” down a state highway or even an interstate andthen crosses the state line to another state where the roads aresmooth, well paved and well marked, the effect of politics becomesphysically evident.

Last month this column singled out New York as a progressivestate regarding electric power. But New York also rates high on theIconoclast's quality meter for roads and highways, as I have passedalong hundreds of miles of toll roads (the New York State Thruway,the Grand Island bridges); non-toll interstates; and plain,old-fashioned local highways full of tiny villages and townsreminiscent of Currier & Ives.

The NYST (I-90) along with the New Jersey, Pennsylvania, Ohio,Indiana and Illinois turnpikes were grandfathered into the 1950sEisenhower Interstate System. Like most interstates built underthat program, though, these roads are now more than 60 years oldand are in constant need of maintenance, widening with added lanes,and in many cases replacement. Some tunnels on the PennsylvaniaTurnpike (I-70) date to the Pennsylvania Central Railroad built inthe mid-1800s. They're still in use. Every interstate and highwayhas hundreds of bridges—and these are the most vulnerable risk.

New York has had its moments: On April 5, 1987, both spans ofthe Schohane Creek Bridge on the Thruway collapsed because offlooding near Ft. Hunter (just west of Schenectady), dropping fivevehicles into the torrent and killing 10 people. In August of 2011the Blenheim Bridge collapsed during Hurricane Irene; it was one ofthe oldest and longest covered bridges in the nation. Butotherwise, New York has done a pretty good job of maintaining itsmany bridges. Other states cannot say the same.

Litany of Disasters
As discussed in “Bridge Disasters—Collapse and Chaos,”(Claims Magazine, March 2006), bridges collapse for avariety of reasons. Considering the number of bridges on thenation's highways and interstates, it is a miracle that morecatastrophes have not occurred. Some states seem to have more thantheir share of losses. On Oct. 27, 2009, two tension rods on theSan Francisco-Oakland Bay Bridge gave way, injuring one person. Andthe same bridge was badly damaged in the Oct. 17, 1989 earthquakewhen one of the upper spans collapsed to the lower span, killingone person, while on the Oakland Freeway 42 people were killed bythe collapse of the upper span of the dual-span highway, whichcrushed cars beneath it. Many of the bridge collapses have been theresult of a natural event such as flooding or earthquake, but anequal number have been the result of heavy trucks or tankeraccidents and poor maintenance.

According to the U.S. Department ofTransportation there are more than 500,000 tractor-trailer(18-wheelers) accidents on the nation's highways and interstatesannually. Statistics reported by the Insurance Institute forHighway Safety show that someone is killed or injured in atruck-related accident about every 16 minutes, with littlefluctuation from around 5,000 vehicle fatalities annually duringthe last decade. As trucking is a $600+ billion industry, wheretime is crucial, the impact of trucks on highways will not soonabate. Look at every multi-vehicle fatal wreck—almost withoutexception a large truck will be involved. Adjusters need to beprepared for the resulting claims. While the truck is not alwaysthe party at fault, speed and following too closely behind othervehicles is often a factor in such pile-ups.

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

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

Structural Failures
Some of the worst ormost notorious highway bridge collapses have been due to structuralfailures, such as the I-35W bridge over the Mississippi River inMinneapolis that collapsed on Aug. 1, 2007, killing 13 and injuring145; or the I-5 bridge collapse in Coalinga, Calif., on March 10,1995, when, as with the Hatchie River bridge collapse in Tennesseethat killed eight, the bridge structure was weakened by heavyrainfall. Bridges in California are subject to collapse in strongearthquakes, as occurred in the Northridge Quake in 1994. Butbridges should be designed to withstand the floods, earthquakes,and even gasoline tanker fires that have caused so manycollapses.

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

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

States Can Lead the Way
States oftentake the lead in highway construction and maintenance, much totheir credit, and often state or U.S. highways are far better andless traveled than interstates. In annual treks between Atlanta andTampa we use U.S. 19, a four-lane highway that parallels Interstate75. I-75 is jammed with trucks and tourists; one can drive forhours on U.S. 19 and never see a truck, plus it is a more scenicroute. On our recent Northeastern journey we used U.S. and statehighways that were four lanes, well paved and totally empty of allbut local town traffic. While we could not go 70 mph as on aninterstate, we avoided the pressure of dodging trucks and trafficblockages due to accidents or road reconstruction.

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

One might wonder why, in many states, the old rural highways arebetter than the federally supported interstates. After all, isn't afixed percentage of federal gasoline tax supposed to go to highwaysand other forms of transportation? The answer may lie in thevarious state constitutions that allocate the size and make-up of astate's legislature. In many states politicians from rural areasoutnumber those from the larger metropolitan areas. In a “good oldboy” legislature those pals of the state highway departmentplanners may be able to allocate bigger bucks for their particulardistricts and outvote the big-city interests in highwayconstruction costs. While that may sound unfair, the same thinghappens in Congress: It's the smaller states' senators orrepresentatives who are often the committee chairmen due toseniority and relatively less competition back home.

Other Infrastructure Issues
It is not just roads and bridges that make up the nation'sinfrastructure. The railroads, including state-funded commutertrains, 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 paytaxes but use government-built highways or waterways.

Yet it is in the nation's cities and larger towns whereinfrastructure is most in need of risk management. In many citiesthe subways and commuter railroads are well over 100 years old,still operating in the tunnels and right-of-ways built in the1800s. In October's Hurricane Sandy some of New York's subways wereflooded, causing millions of dollars in damage. Water systems insome towns are being stretched to the limit as cities expand withpopulation growth and suburban sprawl.

Inner-city metropolitan areas used to be able to depend onproperty taxes to maintain their sewers, water lines, gas lines andstreets, but as the nation's population went from 100 million toover 300 million in less than a century, the wealthier citizensmoved out of the urban areas, and the poor moved in, putting stresson systems designed for fewer people and never maintained properlyor 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 wereforced to cut fire and police services because of shortfalls inrevenue.

Municipal utilities generally cannot afford to rebuild whensewers collapse or water mains break; rather, systems are patchedup and the temporary inconvenience is put off for another day—andanother breakdown. While New York has received much well-earnedpraise in this series, New York City may be the exception. Itsmayors, Michael Bloomberg, Rudy Giuliani and Ed Kotch, didwonderfully well with the massive urban area they managed, but whenone looks beneath the streets the view is a bit stressful. A newwater-system tunnel is going to help considerably, but otherwisemany of the pipes are 100 years old or older, and water-main breaksare common. The waste collection system is subject to unionstrikes, and the occasional labor dispute can leave tons of garbagesitting on street corners. The subway system—especially as the sealevel rises—is subject to flooding in any heavy rain, shutting downvital means of transport.

Across the Hudson in the urban areas of New Jersey similarinfrastructure problems exist. Key projects budgeted at $X end upcosting double or triple. Consider the “Big Dig” in Boston thatcost many times more than budgeted, took many times longer tocomplete, and started to collapse in part almost before it wasfinished. It is a long, complicated tunnel system running from nearLogan Airport under the Charles River to downtown Boston, andhaving recently driven it, I can tell you that it can be a wild andconfusing ride. But then, driving in Boston is only for thebrave—but it is certainly not “free.” The tunnel toll is high, andthere basically is no alternative. Some think a traffic circle isbetter than a traffic signal where one side stops while the othergoes, but for adjusters who handle auto accidents, they are a majorsource of business.

Risk Control and theInfrastructure
Having driven in every state and every major city (from theinfamous I-405 during rush hour in Los Angeles to the streets ofManhattan and Chicago), your Iconoclast finds it amazing that,somehow, perhaps through the mercy of some god of infrastructure orguardian angel, our nation manages to survive. I've also driven inLondon, Paris, Madrid, and Munich and ridden taxis in Rome—a veryscary ride; they are a lot older than American cities and seem tobe holding up reasonably well. A number of issues ago, this columnsuggested some sort of universal service requirement that wouldtake the millions of unemployed youth off the streets and put themto work in places where they were needed, such as infrastructuremaintenance.

Undoubtedly such a notion would be a political lead balloon, butat some point there will be an infrastructure disaster and somecity or state will lack the funds to recover from it. It nearlyoccurred in 2012 when blizzards and Sandy hit the Northeast andbasically shut it down. Businesses cannot afford that kind ofinterruption, but no insurer that I know about sells“infrastructure breakdown” coverage. Our world is complicated, andmaintaining highways, sewage systems, water supply, andtransportation 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 terroristintelligence. Some sort of disaster is inevitable, whether causedby nature or man. There are also perils of cyberwar. An enemy inAsia or Africa could shut down a transportation, water system, orelectrical grid. How does one manage such risk? For localgovernments, the taxpayer is usually also the insurer. Supposehackers shut down a 911 call system. Fires occur, and response isdelayed. The hacker is traced to a foreign government. Can fireinsurers claim the “war exclusion” on buildings that burned downbefore the 911 system was restored? Five thousand lawyers wouldhave five thousand different opinions.

Mayors and local politicians may not be able to risk manageinfrastructure alone. Often there are ethical issues, graft orfraud, special interests, labor disputes, and financial limitationsthat add to the infrastructure burden. Cities have burned downbefore; though unlikely, they could again. But fire is the leastlikely peril that will damage infrastructure beyond repair. It ismore likely that rising sea levels, flooding, excessive rainfallthat could burst dams on water reservoirs, an earthquake thattwists the tracks of commuter rail or subways, or a cyber orterrorist attack will cause a local community to reach the breakingpoint. Will FEMA or the state step in to help? We saw the answer tothat in Hurricane Katrina.

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