Bad roads spur millions of dollars in state claims

COLUMBIA – Potholes and other infrastructure defects cost the state more than $7 million last year.

But not in repairs. The state Insurance Reserve Fund paid that much to settle hundreds of legal claims by motorists or others whose cars were damaged, their bodies injured in accidents or family members lost in wrecks.

According to records of the state Insurance Reserve Fund obtained by The Greenville News under the state Freedom of Information Act, the state last year paid out $5.1 million in claims and another $2.3 million for legal costs in the cases.

The News reported in 2013 that such claims and costs for the preceeding three years totaled $18.7 million.

The claims range from several hundred dollars for pothole damage to several hundred thousand dollars in the cases of fatal accidents.

Legislators say the money is another way bad roads are costing taxpayers.

"We could be using that money to pay roads," said Rep. Chandra Dillard, a Greenville Democrat who sits on a House committee studying the state's infrastructure needs.

"To me it's a large chunk of money. Would we rather continue to pay out funds like this and put people in danger rather than come up with a viable solution to fix our roads and bridges?"

Sen. Ray Cleary, a Georgetown County Republican who has spearheaded road-funding efforts in the Senate, said he was unaware that people could sue the state over potholes.

Cleary said the claims are more evidence at the amount of money that is being wasted by not addressing the state's infrastructure problem.

"In the last five years, we've raised the cost of fixing the roads in South Carolina by $14 billion," he said. "If that's not a waste of taxpayer money, then what is? Why aren't people like the Tea Party demanding these roads be fixed?"

Evidence of the poor condition of many of the state's roads has been abundant.

Just last week, the national group The Road Information Program released a report that said the average driver in South Carolina pays $1,150 extra each year in maintenance, extra fuel and accident-related costs, all due to bad roads.

The state Department of Transportation, which maintains the fourth-largest state road system in the nation, has rated about half its primary and secondary roads in poor condition.

It has estimated, by way of its long-range transportation plan, that the state faces a funding shortfall of about $42 billion for the years leading to 2040.

Gov. Nikki Haley, who has threatened a veto of any increase in the state's 16.75-cents-per-gallon fuel tax, is expected to disclose to lawmakers her plan to address infrastructure needs in her state of the state speech to a joint session of the Legislature on Wednesday.

The claims paid by the Insurance Reserve Fund — which operates as the insurance carrier for state and local governments — are for damages that can be shown to have been caused by known defects in the roads.

According to the agency, claimants can only collect money for pothole damage, for instance, if DOT already was aware of the pothole.

Many of the claims involve lawsuits but many more don't. And some result in no payment.

Hundreds of motorists each year file claims involving potholes, according to the records, the most common type of claim. Those that are paid usually involve several hundred dollars in damages to vehicles, according to the records, such as damaged alignment, broken ball joints or bent rims.

But many other types of claims are filed as well.

The state paid $495,000, for instance, to settle claims in a 2011 Saluda County case involving a fatality in an accident that lawyers for the plaintiffs alleged was caused by obstructed vision at an intersection, according to the records.

The fund paid another $285,000 last year as a result of a Richland County lawsuit brought after a tree limb fell onto a car in 2011.

One citizen was paid $15,000 for his Allendale County claim of falling into a sinkhole, the records showed.

Some claims involved sidewalks, since the state also maintains many sidewalks around the state, or falls into culverts or manholes.

The fund paid $192,500 to settle claims in a 2012 Lexington County case in which the plaintiff fell into a culvert.

Some claims involve traffic signals or signs.

In a Greenville County case, the fund paid $150,000 to settle claims in a 2011 accident involving a missing stop sign, according to the records.

The fund paid $1,049 to one driver who drove through wet cement on the road in 2012.

And another $265,000 was paid for a 2012 Allendale County case in which a motorcycle hit a pothole and some "excess gravel," according to the records.

Those amounts don't include legal fees paid by the fund.

The Insurance Reserve Fund uses various private lawyers to defend agencies in cases. Sometimes their fees exceed the cost of the claim and sometimes the state pays no claim but must pay for the cost of defending the agency.

The process starts with paperwork.

Someone who feels the state's roads are responsible for an accident or damage can request a claim form from the Transportation Department.

If the claim is less than $1,500, it can be filed with the department. It must be notarized and include either two estimates of the repair cost or a copy of the paid invoice, in the case of vehicle damage. If it is $1,500 or more, the claim is sent to the state Insurance Reserve Fund, which acts as the state's insurance agency.

The fund operates from premiums paid by agencies.

If it's a small claim, an Insurance Reserve Fund official told The News in 2013, the fund may go with the claimant's estimate of damages. Sometimes the fund has somebody else look at the damage, he said.

The agency also isn't at fault for situations in which a driver does something wrong or illegal, he said.

Most of the time, he said, a lawyer isn't used unless there is litigation. And claimants aren't required to hire a lawyer, he said.

Officials also say that a claim against DOT must involve a state-maintained road, not a local road. Drivers can file claims involving local roads with local agencies. Almost all of the road-related claims listed by the Insurance Reserve Fund for 2013 were aimed at DOT, according to the records.

Claims are capped at $300,000 per person or $600,000 per occurrence.

Rep. Phyllis Henderson, a Greer Republican who sits on the House infrastructure committee, said it is well known by now that the state has bad roads.

"It's an unfortunate thing that we hopefully will be able to address," she said. "Yes, it is a problem and our work is to come up with something in the next couple of weeks."