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Ding! Swiping that guardrail is going to cost you

By Susan Ladika Posted : 04/17/2012

will my rates rise if I damaged state propertyIf you smack into a guardrail or light pole in Indiana, there's a higher chance than in the past that you'll get dinged for the damages.

Drawing on research from Purdue University's Joint Transportation Research Program (JTRP), the Indiana Department of Transportation (INDOT) has undertaken new means to track damage to state property caused by drivers, and to more quickly bill you or your auto insurance company for the damages, says INDOT spokesman Will Wingfield.

That could boost state damage collections by up to $4 million per year, according to the report, while possibly putting a dent in your liability insurance.

Up to now, collections have hit a roadblock. For the 15 months ending in February 2009, Indiana billed auto insurance companies and motorists $3.5 million for damaged state property, but collected only slightly more than half that amount, according to the Purdue study, "Recovering Full Repair Costs of INDOT Infrastructure Damaged by Motor Vehicle Crashes."

Factors that contributed to ineffective collections

Collections have been impeded by uninsured motorists, unlicensed drivers, claims that exceed liability insurance coverage limits and auto insurance companies that claimed their policyholders weren't at fault, Wingfield says.

It also hasn't helped that the state sometimes has been slow sending the bill to insurers. In the past, when a long time has lapsed - months instead of a day or two - between the crash and the time insurers get a bill, insurers could contend that further damage was done by other motorists after the initial incident.

To speed the process, the Purdue study recommended steps for making INDOT more effective in linking accident reports with damaged property. It also recommended ways for INDOT to reduce the time between when an accident occurred and when an invoice is actually sent to an auto insurer or motorist.

New system speeds up collections for state property damage

To boost insurance collections, the INDOT developed an electronic damage tracking system dubbed DamageWise.

As part of the new system, police carry tags that can be tied to damaged property. The tags contain the date of the crash and accident report number. INDOT can take that information and find the corresponding accident report to learn which motorist damaged the property.

INDOT workers also contribute to the new system by using hand-held surveying tools that contain software that lets crews record the type and amount of materials needed to make repairs. The state uses that information to determine how much to bill you or your insurer.

INDOT workers also can take photos of the damage with the hand-held device. They then add geographic coordinates and an electronic time and date stamp to the images.

That can speed up the damage collection process. In the six months following the launch of DamageWise in July, the state had billed auto insurance companies and motorists for $2 million, compared to $1.4 million for the entire 2010 fiscal year.

Florida, Minnesota, North Carolina, Kentucky, Texas and Tennessee are also using systems similar to the Indiana effort in an attempt to link drivers to damaged state property, according to the study.

How does a state know when a driver damages something?

The Indiana Department of Transportation learns of property damage in various ways. Damage might be spotted by state highway maintenance patrols, mentioned in police reports, recorded when auto insurance companies call to close claims or reported by individuals, Wingfield says.

If the property damage and motorist's insurance policy information is mentioned in a police report, INDOT contacts the insurer directly. If not, the vehicle's driver and owner are contacted.

If someone sideswipes a guardrail and drives away without reporting it, it's considered leaving the scene of an accident, and the motorist could face prosecution, Wingfield says.

How are auto claims processed when drivers ding state property?

Rebecca Nahat, a claims manager with Esurance.com who primarily deals with Florida cases, says the auto insurance company receives information about damages from police reports. The company then conducts its own investigation and may come up with its own estimate of repair costs.

The motorist is covered through his or her liability insurance, which must be a minimum of $10,000 in Florida. If a driver with $10,000 in liability insurance causes a multicar accident and then hits a guardrail, the property damage might exceed $10,000, Nahat says.

In that case, the money is doled out on a pro-rata basis. Imagine that damages total $20,000, with the other vehicles sustaining damages totaling $16,000 and the guardrail sustaining damages of$4,000. In that case, 80 percent of the coverage would go to the other drivers, and 20 percent would go to the state.

Or if the damage to state property, such as a bridge abutment, exceeds the $10,000 policy limit, the insurance company and the state will negotiate a settlement, she says.

While the state could go after the motorist for the remaining repair costs, in most cases the state will view it as, "let's get what we can" and agree to a settlement, Nahat says.

Will my car insurance rates go up if I hit state property?

Robert Passmore, senior director of personal lines for the Property Casualty Insurers Association of America, says sometimes car insurance companies and states can be at loggerheads over costs, with the state claiming more for repairs than the insurer believes is valid.

The impact on your car insurance rates will vary, based on your driving history. So if you run off the road and hit a light pole, whether your premium will rise can be a matter of whether "this is your only accident in 20 years, versus it's the latest in a string of mishaps," Passmore says.












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