Pothole policy threatens auto premiums

An investigation into one city’s pothole policies reveals an “absurd” approach that could increase premiums for affected drivers.

Construction & Engineering

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An Ottawa man has placed the city’s “hands off” potholes policy under fire, calling its approach to addressing damage claims in construction zones an “absurd” affront to taxpayers, reports CBC News.

The controversy began when Alex Liculescu’s girlfriend damaged her 2014 Mini Cooper on an inconspicuous pothole at a city intersection.

“There were some unmarked potholes or road cuts that were very deep and they couldn't be seen in advance before driving through," he told the CBC. "It violently shook the car as we drove through the potholes and it instantly created a rupture in the tire and messed up the car's alignment.”

The City of Ottawa told the couple that it was not responsible for the $650 worth of repairs, and sent their claim to the construction contractor that was conducting work on those streets.  But that contractor denied it as well, arguing that it wasn’t liable since the pothole was repaired within 12 hours of the incident. 

Liculescu was left to pay out of pocket or claim it on his insurance as an at-fault accident and suffer the requisite hit to his insurance premiums.

This is all acceptable under Ontario regulations, which allows cities to forward pothole-related damage claims to private contractors and leave the matter in their hands. This is all made clear on the City of Ottawa`s website, which reads, “If you disagree with the contractor’s decision, you can contact the City’s Claims Unit to help better understand the basis on which the claim might have been denied, although the City cannot intervene directly on your behalf.”

Liculescu wants that policy reformed.

"I would expect that some of my tax dollars go towards maintaining and fixing the roads, and when I have an issue with said road I would expect to deal with the city directly instead of dealing with a third-party contractor," he said.

Ottawa’s city solicitor has gone on record to say that he believes the city’s policies are reasonable, and should remain in place since sending claims to private entities spares taxpayers’ expense.

“It has long been recognized that governments, and municipalities in particular, are not insurers for all misfortunes that might befall a motorist, cyclist or pedestrian using their roads," Rick O’Connor told Insurance Business in an email.

He cites the 1917 Supreme Court case of Faford v. City of Quebec as evidence of this, which ruled that municipalities should be considered “an insurer of travellers using its streets.” In addition, he says that forwarding claims to contractors “serves to ensure that the City does not prejudice its own claim to the indemnity and also prevents the unnecessary expenditure of City resources to deal with matters for which it has no legal liability.”

Liculescu disagrees, arguing that this process works against the interests of city residents, who can be quickly denied by contractors and often find it “pointless” to file auto insurance claims that may require paying a deductible that exceeds the cost of damages.
 
"On top of that, it counts as an at-fault accident. Your rates will increase for the next decade," he said.

Earlier this year, Ottawa’s Public Works Department reported that city streets boasted the fewest number of potholes since 2013, and officials only received 888 service request calls between January and March, compared with 4,167 in that timeframe last year, according to the Ottawa Sun. But while conditions may have improved, Liculescu still hopes that the city’s claims process will be treated to an overhaul.

"At the end of the day, you're stuck for the damages and nobody is willing to admit any kind responsibility for leaving the roads in such a state," he said. "I feel like I'm in a losing scenario. There's no real way to win."
 

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