USAgencies

While it may seem to be adding insult to injury, some budget-challenged municipalities in the country are charging an accident response fee. Fortunately, constituent complaints have caused many state governments to reconsider the practice, going so far as to outlaw them statewide.

Louisiana and Alabama are two of twelve states, which also include Arizona, Arkansas, Florida, Georgia, Indiana, Kansas, Missouri, Oklahoma, Pennsylvania and Tennessee that now ban accident response fees. But, a number of cash-strapped municipalities across the United States are charging for police and fire department responses to car crashes.

What exactly are emergency response fees?

Emergency response fees – in locations that permit them – are fees levied at a motorist who is deemed at-fault in an automobile accident. The fees will either be billed directly or through his auto insurance company to help off-set the cost of police, fire and other emergency service responding to the crash.

The fees can vary considerably between jurisdictions, but according to the Insurance Information Institute, the amount ranges from $100 to $2,000. Furthermore, the institute reports that more than 25 states have municipalities that have imposed accident response fees.

Although opponents have labeled the fees “crash taxes,” localities known for charging the fees argue that they are justified, since auto insurance companies benefit from the accident reports that first and second responders supply them with. Therefore, it goes to reason that insurers help mitigate the costs of law enforcement or fire officials responding to the scene of accidents.

Why are they called “crash taxes”?

Those opposed to accident response fees dub them “crash taxes” because they are nothing more than “double taxation” for those who pay local taxes for fire and police to respond to emergencies, according to the American Insurance Association (AIA).

Still, traveling through states that allow municipalities to charge for emergency responses to automobile accidents could be costly, especially if they follow Michigan’s example of charging the fees only to out-of-towners who don’t pay local taxes. The Insurance Journal reports that this would make you responsible for any fees accrued as a result of a crash you caused while visiting one of these locations.

Unintended consequences

If your insurance company gets stuck with the tab for an accident response fee, even if the wreck and injuries weren’t your fault, your insurance premiums are likely to go up substantially. Worse yet, according to the Insurance Information Institute, should your insurance company refuse to cooperate and settle the fee, you may have to foot the bill yourself.

And, the going could get rough because many of the municipalities rely on collection agencies to get resolution. Once the bill goes to collections, your credit will suffer and you may have no option but to pay the fee out of pocket.

In closing, while Louisiana and Alabama don’t currently charge accident or emergency response fees, you could be passing through a state that does. Drive carefully and stay buckled up.

You may want to check with your insurer next time you travel across state lines to see what your liability will be in regards to these types of fees. If you’re currently shopping for low-cost auto insurance or aren’t satisfied with the company you’re with, call USAgencies at (800) 420-3712 to get a free, no-obligation car insurance quote. You can also request your free auto insurance quote online.