Frequently Asked Questions

All About Cost Recovery

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What is Cost Recovery? How does it Work?

What is Cost Recovery? How does it Work?
If your department responds to motor vehicle accidents/fires, structure fires, or hazardous materials incidents, there may be insurance funds available to reimburse your department for these services. Here’s how it works-when you respond to an incident, you furnish Covenant Solutions the standard information from your run report. This information can be submitted via email, fax or our website. Covenant then works on your behalf to process a claim with the appropriate insurance company(s). Covenant receives a percentage of the total amount collected for your department. There is never any charge unless Covenant collects for you!

Is Cost Recovery Legal?

Is Cost Recovery Legal?
The number one issue concerning fire rescue cost recovery today is; is it legal? Fire Service incident response “cost recovery” is legal in every State in some form. There are variations and limits that can come into play; based on Federal law, State law, Local law, and ultimately the insurance policy itself, and it is important to understand that each State can have different guidelines regarding the issue of cost recovery. In most States there are not yet any specific laws in place to address cost recovery, so the issue is decided on the local level (home rule). You will want to become aware of any State and local guidelines that may exist before you proceed and how they may address the cost recovery issue. Covenant of course will be happy to provide available information for your State.

Is Fire Service Cost Recovery a new concept?

Is Fire Service Cost Recovery a new concept?
No! Fire response Cost Recovery practice began in the late 1700s when Benjamin Franklins organized one of the earliest fire Insurance endeavors in Philadelphia and reimbursed local fire companies for their response. The concept has evolved over the years to include recovery for many other types of responses such as haz-mats, MVA’s, gas-main events and so on.

Is this double taxation?

Is this double taxation?
The idea is misleading and unsubstantiated propaganda! Substantiated data from multiple studies shows that “After the United States was attacked by terrorists on Sept 11, 2001 the public has come to realize that the fire service is our first line of defense against a terrorist attack” (Austin 2002). “In the new post September 11th era, fire departments should have budget increases rather than cuts. The funding cuts have come just as we need more, not less” (Austin). “Budget pressure comes at a time when there are increasing concerns for fire fighter safety and an increasing array of other services provided by departments such as HMRTs, and Technical Rescue Teams”, (Federal Emergency Management Agency, 1999). “The Increased demand has forced departments to pass fees on to the user when tax revenue is not adequate” (Coleman 1991). “The best method for shifting cost of some of the services away from tax revenue is Cost Recovery” (Dahms, 1992). “Cost Recovery is defined as the reimbursement of the cost associated with an incident response. The public perception does exist that charging a fee to a user of a service, does promote equality within the community” (Bradner 2006). One example of this method is the waivers of school property taxes for the elderly. According to Anderson (2000) “user fees are typically politically acceptable. It makes sense that those that use the service should pay for it. Conversely, those who don’t use the service support the user fee because this, in theory, reduces the general taxes or frees up resources for other programs!”

How many fire departments are using cost recovery programs?

How many fire departments are using cost recovery programs?
Thousands of departments and rescue squads across the country are utilizing cost recovery and the number increases daily! More and more departments are enjoying relief from funding worries, by choosing Cost Recovery as a viable funding option! Covenant currently serves over 750 departments across our nation in 30 states.

How much money will it generate for my department?

How much money will it generate for my department?
Each department’s reimbursements vary depending on factors such as your State Fire Marshall’s recommended fee schedules, the number and make-up of incidents, as well as the type of motor vehicle/homeowner insurance policy and coverage’s available. Covenant can compare your stats to departments with similar stats in your state, to give you an average of what you could expect to receive on a monthly basis.

How much does Covenant Solutions charge the insurance company?

How much does Covenant Solutions charge the insurance company?
You are in control of and set your own fee schedule! We do provide you with a recommended fee schedule that works very well for many of our clients! Covenant Solutions acts as your agent in recovering the costs your department incurs while providing services. Your department’s reimbursement rates ultimately are established by you. We will diligently seek reimbursement for the fee schedule set by your department.

Can I terminate my agreement with Covenant Solutions at any time?

Can I terminate my agreement with Covenant Solutions at any time?
Yes! We only want your business if you are 100% satisfied with our services. You may discontinue the relationship with Covenant Solutions at any time. We do have a flexible contract available if preferred.

What is Covenant Solutions' customer retention history?

What is Covenant Solutions' customer retention history?
We are proud to report that Covenant Solutions currently retains 98.8% of customers who have placed their billing services with us. We believe our commitment to customer satisfaction and superior collection methods will continue our excellent customer retention level in the future.

May we contact existing Covenant Solutions clients for referrals?

May we contact existing Covenant Solutions clients for referrals?
Absolutely! We will be happy to furnish a list of contact names, addresses, phone numbers, and testimonial letters from Covenant Solutions customers! Click here to view testimonial letters from satisfied Covenant Solutions Customers!

Are there any Startup or out-of-pocket costs associated with using Covenants Solutions services?

Are there any Startup or out-of-pocket costs associated with using Covenants Solutions services?
Never! There are absolutely no charges unless we collect for you!

How can we implement a Cost Recovery program?

How can we implement a Cost Recovery program?
When there isn’t a federal or state law addressing an issue, local communities and municipalities may pass local laws that do. Cost recovery is commonly addressed as such. Because State and Federal laws can be subject to change, Covenant maintains access to a large network of attorneys’, allowing us to stay current at all times, on all issues and levels (State and Federal).

How do we get started recovering our costs with Covenant Solutions?

How do we get started recovering our costs with Covenant Solutions?

  • Pass an ordinance or resolution (recommended)
  • Fill out a department info form & W9 form.
  • Submit your forms and you are ready to begin sending run reports for processing! (a specialist will walk you through the process step by step!)

If you have additional questions about how we can help you improve your Annual Revenue Budget, please Contact Us
or
Call (866) 259-1391

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