ADOT’s Insurance Recovery Unit recoups millions for damage to highways

PHOENIX – In another example of the Arizona Management System producing results for taxpayers, the Arizona Department of Transportation recouped $6.6 million for damage to the state highway system during the fiscal year that ended June 30. That’s more than double what the agency recovered four years before and reflects continuous increases since then.

ADOT accomplishes this through its Insurance Recovery Unit, which has a goal of saving Arizonans from bearing the cost of repairs when individuals or firms are responsible for damage to the highway system. Comprised of professionals with insurance industry backgrounds, the unit reaches out to the responsible parties and their insurance carriers to recover the repair costs, which include labor, equipment and materials.

The money recovered goes into the State Highway Fund.

One case of damage that made headlines last year illustrates the value of this work: An over-height vehicle struck a girder and sign at the Interstate 17 bridge over Seventh Avenue in Phoenix (show in the photo), requiring extensive repairs along with traffic restrictions. The Insurance Recovery Unit has documented $361,430.15 in repair costs so far, and the recovery process will begin when the final total is available in the coming weeks.

“Making sure those who damage state property are held accountable protects Arizona’s investment in its highway system,” said Ted Howard, deputy director for ADOT’s Administrative Services Division, which includes the Insurance Recovery Unit. “Applying principles of the Arizona Management System has enabled us to dramatically increase insurance recovery to the benefit of Arizonans.”

Championed by Governor Doug Ducey, the Arizona Management System challenges every state employee to continuously look for ways to improve agencies’ value to customers, including taxpayers.

Process improvements within the Insurance Recovery Unit include reorganizing operations to have separate teams tasked with researching responsible parties, sending requests and negotiating the final amounts recovered. Before that, each adjuster in the unit handled all aspects of a claim.

“Now we have the best individuals in the right jobs,” said Jim Cupp, who leads the Insurance Recovery Unit. “The efficiency of this model has allowed us to greatly increase recoveries with the same number of employees.”

In fiscal 2014, the unit processed 1,400 claims to recoup more than $3.1 million in damage to the state highway system. For fiscal 2018, the unit handled 2,652 claims to recover $6.58 million. That’s up from $5.41 million in fiscal 2017 and $4.94 million in fiscal 2016.

The recovery process begins when law enforcement responds to an incident in which guardrail, a bridge or some component of the highway system has been damaged. The officer will mark the damaged item with a sticker that has the incident report number on it. When ADOT is notified of the damage and makes the repair, a member of the Insurance Recovery Unit will contact the responsible party or their insurer to file a claim.

Since July 2013, ADOT’s Insurance Recovery Unit has processed more than 12,000 claims.