Winter is the gift that keeps on giving. Long after the snow and ice have melted, potholes make their annual appearance and terrorize motorists.
This year has been brutal. Bitter cold and record snowfall from Detroit to Dallas set the stage. Roadways contracted and expanded, water seeped into the cracks and car-swallowing craters appeared. The economic toll is staggering: the American Automobile Association (AAA) figures US drivers will spend $6.4 billion on repairs.
This year’s winter storms dealt more than $1.5 billion in insured losses, due in part to all the auto accidents. The insurance industry can handle it; it’s built to.
Governments, however, are stressed. Chicago is quickly burning through its pothole repair budget. Same with New York City. This summer, crews will still be at work – erecting barriers, closing lanes and causing traffic jams. It’s a domino effect, often resulting in more accidents and delays.
The American Society of Civil Engineers gives our nation’s roads a grade of D and estimated they do about $1,000 damage to the average vehicle. Meanwhile, the debate rages over how to improve our highways. Despite a few game attempts, Washington has yet to come up with an answer.
It doesn’t have to be this way. The US needs a new transportation vision grounded in resiliency. It’s more than patching a pothole. It’s about marshaling the forces of the public and private sectors to secure the funding to make timely repairs and invest in a sustainable infrastructure.
Take Alabama, for example, where the State Insurance Fund backed by Swiss Re pays for rapid recovery and reinvestment in the wake of hurricanes. National governments are also mobilizing; Mexico is better equipped to rebuild from earthquakes thanks to a public-private partnership that guarantees a payout based on parametric triggers.
These programs can be replicated anywhere because the public sector has the local knowledge and the private sector has the financial wherewithal. It’s a powerful combination.
Using this approach, governments can not only recover more efficiently (thus reducing the financial burden on everyone), they can implement intelligent, far-reaching transportation solutions.
There’s also financing before the event strikes. Governments can buildup reserves by purchasing weather insurance with parametric triggers. When the snowfall or earthquake exceeds a predetermined threshold the policy pays out immediately, so rescue and recovery personnel can swing into action. Just like stockpiling road salt, a city knows in advance it has access to funds when needed.
Re/insurers have a deep repertoire. In addition to paying claims, we invest in making societies more resilient. With global spending on infrastructure expected to grow to around $4 trillion by 2030, there’s certainly opportunity.
So let’s get behind the funding of smart infrastructure to promote safer and more efficient transportation systems. And somewhere in there we hope there will be a solution to eliminate potholes!
Category: Climate/natural disasters: Resilience
Location: The United States