Source: Sherman Publications

Board dumps fire insurance withholding

by Susan Bromley

March 05, 2014

Brandon Twp.- The township will not be joining a fire insurance withholding program that would have given officials the ability to retain up to $8,200 of a homeowner’s insurance settlement in the event of a fire.

A motion to join the state program failed at the March 3 board meeting, with Supervisor Kathy Thurman, Treasurer Terri Darnall and Trustee Bill DeWitt voting yes, while Clerk Candee Allen, and Trustees Dana DePalma, Ron Lapp and Jayson Rumball voted no.

Fire Chief Dave Kwapis and Building Director Bill Dinnan had encouraged the board to join the program, which would ensure that fire-damaged properties in the township are cleaned up, and spoke in favor of it Monday night.

“This is not a place for the township to get rich quick, it’s not our money,” said Dinnan. “The money would go into escrow and can only be used to restore property. The interest earned is all a township gets. We hold (the money) until a licensed contractor is signed and then the money is released... We’re not here to stop anyone from rebuilding their house, but it protect unwilling bystanders.”

Those unwilling bystanders would be neighbors of a burned out home or building who would have to contend with an unsightly mess and repugnant odors if the property’s owner walked away.

It was just such an incident that prompted Kwapis and Dinnan to bring the fire insurance withholding program to the board’s attention. A few years ago, a residence on Seymour Lake Road in the township suffered fire damage and the homeowner sold the property in “as is” condition. The building sat vacant for two years, as Dinnan said neighbors in the area “got to enjoy the aroma of a burnt building” in the hot, humid days of summer.

About 580 communities statewide, including Atlas Township, can avoid such problems as members of the fire insurance withholding program, administered through the state’s licensing bureau. The withholding is to assure, to the extent of the funds received, that the damage has been repaired or replaced, that the damage has been removed from the site or that the insured has entered into a contract for repairs or replacement or removal and that the withheld monies be paid directly to a licensed contractor for performing the above services.

However, a resident protested at the board meeting that the township should not be holding on to money that is meant for those who have suffered a loss, and the majority of board members agreed.

Trustee Ron Lapp called it one of the most controversial issues he has seen in his time serving on the board (which included a previous stint as township supervisor) and Trustee Dana DePalma questioned why the township would keep any interest earned on money that was withheld.

Boardmembers also expressed doubt that one occurrence of an insured homeowner not cleaning up their property after it was damaged by a blaze constitutes a problem.

“If you’re living next door to (a fire-damaged property), it doesn’t matter how many there has been— it’s a problem,” said Dinnan.

“Hopefully we had our one and done,” said Kwapis. “You could spend a lot in court proceedings.”