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Township OKs insurance withholding program

February 22, 2012 - Atlas Twp.- Cleaning up after a house fire may soon be a sure thing for township residents.

On Monday night, the board of trustees voted 5-0 to withhold township residents' insurance money in escrow from casualty losses including fire or explosion to repair, replace or remove damaged structures that may violate local codes. About 500 municipalities statewide currently utilize the fire insurance withholding program.

Township Supervisor Shirley Kautman-Jones said the program is designed to protect the community.

"I attended a conference that covered the issue of insurance withholding and how it worked with area fire departments," said Kautman-Jones.

"I remember the issue with the burned-out party store on M-15 in Goodrich and recently a residential fire in the township of a home in foreclosure. The owner didn't have title to the property anymore and the burned-out home is just sitting there. In both cases the insurance withholding program would have at least provided the township some funding to clean up the property."

According to the insurance code, municipalities with a population of less than 50,000 located in counties with less than 425,000 in population that have passed resolutions establishing escrow accounts are allowed to escrow 25 percent of a fire insurance settlement, for fire and explosion losses. Atlas Township has about 6,700 residents. For residential property, the 25 percent settlement shall not exceed the annually adjusted amount of $7,873.

"The bottom line will be to not use taxpayer money to fund the clean up," she said. "It will keep everyone in the know and insurance companies cannot make a pay-out until the township is notified."

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