California Crash Tax Survey Cites Florida Senate Study
Oct 5, 2010
The following news release published October 5, 2010 cites a Florida Senate study on billing accident surcharges to insurance companies. Florida, along with other states, has since outlawed these “crash taxes.”
Poll Finds Opposition to Billing Auto Insurance Carriers for Accident Fees
LOS ANGELES, Oct. 5 /PRNewswire/ — Poll results recently released by a California insurance organization indicate that half of 800 respondents disagree with the idea that communities should levy fees on out-of-town motorists who cause accidents that require city-funded emergency response services. Further, an even greater proportion (62 percent) opposed the practice after being informed that auto insurance carriers typically receive the bills for such fees. Although some do, not all insurers will cover accident response fees. OnlineAutoInsurance.com encourages policyholders concerned about these fees to contact their insurers to find out if they’re covered.
There has been growing discussion in California in recent months about the appropriateness of these accident response fees. With the economy still sluggish – unemployment rates are still hovering above 12 percent – municipal tax revenue is down, and cities are looking for ways to plug budget holes.
The cities of Sacramento and Huntington Beach both have considered billing CA auto insurance companies for such fees; the idea has provoked negative reactions in both cases. The Sacramento City Council postponed discussion of adopting such fees shortly before it was set to vote on the matter, and, after getting much negative feedback, the Huntington Beach City Council did away with the practice shortly following its implementation.
Respondents to the poll – which was commissioned by the Insurance Information Network of California and conducted by Public Opinion Strategies – expressed the heaviest opposition to the fees when told that, if insurers begin to routinely pay for them, premium prices could be pushed upward as a result. This information provoked 63 percent of respondents to say they disagreed with the fees.
Whether an insurer will foot the bill depends on company policy. A 2009 report to the Florida State Senate cited a company that specializes in police and fire department billing as saying that, nationwide, 56 percent of insurers at the time covered the fees. The report indicated that a number of the municipal ordinances portrayed the fees as an “add-on cost of the claim for damages to the vehicle, property and/or injuries sustained by the vehicle occupants.”
At the time of that report’s presentation, Florida was considering outlawing cities from imposing accident-response fees. Since then, the state government enacted a statewide ban on the practice, as have nine other states.