I am a network admin for an insurance defense law firm in Mississippi which handled a large part of our state’s Katrina related insurance defense. People, often rightfully, get emotional about the way the large insurance concerns handle the aftermath of a massive disaster. It’s a numbers game for the insurers, and they are obviously in the business to make a profit. What I’ve found fascinating is the whole Scruggs debacle with severe corruption on the defense side of a large class action legal battle. When people are suffering, everyone wants to see aid (in this case, reconstruction aid) delivered as quickly as possible. However, the Scruggs incident shows exactly what the insurance companies fear and why much of the legal wrangling takes so long. Scruggs represented a large number of innocent clients, and their interests were severely hurt due to bad representation.

The chaos following a major natural disaster is rife for corruption. It attracts unscrupulous elements of all sorts, and we witnessed the misuse and sometimes embezzlement of government funds in the devastation following Katrina. For right or wrong, we will see the process of insurance settlements take a period of years in many cases. The government’s ability to provide large scale infrastructure renewal is very limited in the short term, too.

Many in the nation object to footing the tax bill for bailing out people who intentionally rebuild in disaster-prone areas. Some called for NOLA to be abandoned. If the storms are becoming more frequent, and if our coastal cities are subjected to cycles of destruction more often than every 10 or 20 years; I believe our system will passively cause the abandonment of high risk areas like New Orleans. Congress won’t vote to abandon or relocate NOLA until long after it has been effectively abandoned by our reconstruction processes working on a slower cyclical scale than the storms do. With 20 year (I don’t have exact figures at hand) cycles of destruction on the Mississippi Gulf Coast, the system functioned to rebuild the diverse interests. With 10 or even 5 years cycles of destruction, many elements of society won’t have the opportunity to exist in the high risk areas.

But this seems beneficial to the rest of us as people will tend not to try to live where they ought not try to live.

When Uncle Sam chips in to pay for storm damage of people who live near rivers and coasts this amounts to more prudent people paying for the decisions of less prudent people. I hate it when that happens. The less of it the better.