Web posted
Tuesday, August 19, 2008
City wants insurance payback
By FOSS FARRAR
Traveler Staff Writer
reporter@arkcity.net
To recover some of the local police department's cost of traffic accident investigations, Arkansas City city commissioners recently passed an ordinance charging fees to insurance companies of drivers who are at fault in accidents.
The ordinance was published in the Traveler last Thursday, and became effective that day. Commissioners approved it at their meeting Aug. 5.
Last Thursday, a few people brought the ordinance to a town hall meeting held by the city. The ordinance says people will be billed if the insurance company does not pay. The wording took commissioners by surprise at the time.
At a work session meeting Monday, City Attorney Tamara Niles said the ordinance was worded that way for legal reasons. She, and other commissioners, said the city would not be billing individuals.
Mayor Mell Kuhn said today the questionable wording was not intended to mean that individuals would be billed.
City Manager Steve Archer said Monday that Ark City isn't the first city to adopt such an ordinance, although it is probably the first in Cowley County.
"Other states and other cities' insurance companies will pay for accident investigations," Archer said.
He noted that police spend many hours filling out diagrams and forms for accidents and that these are basically done for insurance companies. They rely on the police to investigate before paying damage costs.
Archer said insurance companies of at-fault drivers could pay "$400 to $500 per accident, depending on the time an office puts in; it's built into the rate."
Nevertheless, an insured driver's insurance rate would not increase because of the added fees, he said.
The Arkansas City Police Department investigated 513 motor vehicle crashes in 2007, and 54 percent of these (276) involved drivers from out of town, said Police Chief Sean Wallace, in a report to Archer promoting the new ordinance.
Wallace said in his report that traffic accident investigation is outside the scope of basic police protection, investigations and apprehension of criminals.
"Responding to motor vehicle accidents simply stated is a civil action," he wrote. "The citizens at large who are paying taxes for police service did not directly benefit from those investigations."
Payment by insurance companies is voluntary and is handled by Cost Recovery Corporation, Wallace said in the report. Using the services of CRC will allow the police department to recover over 50 percent of the annual costs for investigation of motor vehicle crashes.
"Currently, on average 56 percent of the insurance companies in the United States recognize the value of these services and support this proactive program," he wrote.
The ordinance as published in the Traveler states that fees for deployment of police vehicles to traffic accidents initially be charged to the insurance carrier for the at-fault driver. It also states that "claim costs also shall be charged to the owner of the vehicle, the owner of any responsible property and/or other responsible parties."
But Archer said that it's the insurance companies that pay. At-fault drivers wouldn't be arrested if they can't pay, he said.
"Insurance companies are used to paying for this, and are willing to pay," Archer said.
According to Wallace's report, if the at-fault driver is a non-resident and their insurance company refuses to pay, a letter is sent to their insurance company encouraging them to pay and giving reasons why it is beneficial to do so.
"If the at-fault driver is a taxpaying resident and their insurance company does not pay, then that particular cost is just written off," Wallace said in the report.
All fees recovered under the ordinance will be placed into a fund established by the city clerk to be used for capital improvements to the equipment, facilities and supplies for the Arkansas City Police Department, the ordinance states.
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