By David Fleet

Editor

Atlas Twp.- In 2012 when the board of trustees voted 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—the cost was $7,873.

Effective July 1 that dollar amount has jumped to $12,056. About 500 municipalities statewide, including Atlas Township and the Village of Goodrich currently utilize the fire insurance withholding program. Brandon Township opted to not participate.

The Department of Insurance and Financial Services (DIFS) administers 39 public acts and regulates a variety of individual licensees and entities including overseeing the fire insurance withholding program.

“We have not had to utilize the fire insurance withholding program as yet,” said Shirley Kautman-Jones, township supervisor. “When the township started with the program we were at the tail end of a great number of foreclosures. The policy assures the homeowner does not just cash out the insurance and walk away.

“We don’t want to be left with a burned out shell of a home and no one to pay to remove it.”

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.

According to the DIFS, the insurance company pays its policyholder for losses, a certain amount of the insurance settlement will be withheld and forwarded to the township. The funds are then held in a specified escrow account until the structure is repaired, replaced, or demolished.