I am from the government and I am here to help you. The famous line from then presidential candidate Ronald Reagan claiming that the government is here to help you, will in my view always be remembered as the defining quote in his campaign that led to a conservative Republican victory and his election to this country’s highest office.  But that was then, what does it have to do with current events?

Well it seems despite the revolution to get big government out of our lives; some folks in FEMA did not show up for the class. A press release from the Department of Homeland Security ‘s Office of Inspector General states that government contractors dropped the ball and as a result it may come back to bite U.S. taxpayers. It seems there were widespread deficient insurance reviews by the private sector for insurance coverage purchased but not claimed resulting in FEMA paying more than they should have.

This release caught my eye as it seems FEMA in fact was bestowing millions of federal dollars that should not been paid until all private insurance coverage was investigated and paid. Maybe President Reagan was wrong.  In fact, the government was there to help Floridians with the taxpayers’ largeness.   But wait there is a bigger picture to this mammoth screw up, and remember this only deals with events that occurred ten years ago.

I think most of us could agree that an estimated $177 million is no small amount and as this release says, it may leave taxpayers on the hook for millions more in future losses.  The release goes on to say this is only for the 2004-2005 Florida hurricane losses and there may be an estimated $1 BILLION in future disaster costs the government may be liable for!  Guess who is going to pay for the government’s missteps?  Yep, you and me.

But who could argue with the government helping folks out after their homes and businesses are damaged and destroyed. Certainly, getting community property and its infrastructure up and running is a necessary endeavor to help folk’s recovery.

But apparently rules were not followed by FEMA contractors and had they been, it may have saved the federal government (you and me) millions of dollars had private sector insurance policies been reviewed, claims made and policyholders paid for losses they paid a premiums for.

My take on this is that the FEMA contractors did not understand private sector insurance, how to review a policy for coverage, how to take the facts of a loss and apply them to coverage, and finally how to adjust a loss. If the trained FEMA contractors did not know how to work the process, certainly the folks struggling to recovery did not have the skills, training or time. So the easy way was just write government checks presumably after sending someone out with a clipboard to check off the boxes to confirm that they saw the loss and some payment from FEMA would be justified.

As to that future $1 billion, looks like it will have to do with losses that will be likely to happen to property that would not happen had FEMA made the communities and their residences comply at the time they were handing out money on the claims 10 years ago. As they did not, folks will have losses sometime in the future and guess where they will go for help.

A simple solution would be for the various entities to hire trained, professional adjusters to go through their policies and make sure all the private insurance policies are fully paid out to avoid what has happened here.

So all local, cities, counties, and state officials or others who have private insurance, hire a professional public adjusting company on either a retainer or contract with them after a loss to make sure your community fully recovers from the policies you paid for. Otherwise, FEMA may come knocking looking to get money back and your ability to go to your own insurance company may have been prejudiced due to statute of limitation issues.

Can you image the political fall out over that come reelection time? Once the electorate finds out you left private insurance money (which you paid for) on the table and now FEMA wants some of their money back, there will be a political price to pay.