Poll: Crash Taxes a Bad Idea

Three out of four adults (76 percent) believe their taxes cover the time and services provided by emergency response providers following a traffic accident and additional accident response fees charged by local governments are not necessary.

In recent years, local governments looking to plug budget shortfalls have sought to impose fees on traffic accident victims. But a new Harris Interactive poll for the Property Casualty Insurers Association of America finds that these fees are very unpopular.

“There is strong public opposition across the country to this new trend of charging accident response fees,” said Robert Passmore, senior director, personal lines for PCI.

Accident response fees are currently being discussed in several major cities including <a href=”https://www.insurancejournal.com/news/east/2011/01/14/180369.htm”>New York City</a>, Denver, <a href=”https://www.insurancejournal.com/news/west/2011/01/27/182197.htm”>Sacramento</a> and Tulsa.

The fees can range from a few hundred to a few thousand dollars or more. Some local governments levy the fee on all accident victims, while others just charge out-of-town drivers. Still others target at-fault drivers or accidents that involve fires or spill cleanups. These fees are often charged to insurance companies. But often these costs are not covered by insurance, which could leave the accident victim facing a bill or the potential of higher insurance costs, according to insurers.

According to this survey, only one-third of adults believe charging these fees are appropriate, while twice as many (six in 10) disagree with the practice.

Opponents argue that police or firefighting services are already paid for through property and other local taxes to handle accidents.

“Motorists clearly see this for what it is: local governments trying to impose a hidden, double tax on consumers. We call these fees an accident tax or crash tax,” said Passmore.

The opposition to charging these fees grows to 66 percent if it were to lead to an increase in the cost of insurance and 70 percent if only non-residents are charged the fee.

The survey also found that charging accident response fees could also have a significant impact on local businesses and tourism, as more than four in 10 adults reported they would be reluctant to travel in towns that assess such fees.

“The crash tax adds insult to injury by victimizing drivers twice – once by being in an unfortunate accident and then again with a fee,” said Passmore. “Then when you add the potential negative impact on local businesses, charging for emergency services is simply a bad public policy option for local governments.”

According to PCI, 10 states currently restrict local governments from charging accident response fees. Such legislation is already in effect in Alabama, Arkansas, <a href=”https://www.insurancejournal.com/news/southeast/2009/04/22/99821.htm”>Florida</a>, Georgia, Indiana, Louisiana, Missouri, Oklahoma, Pennsylvania and Tennessee. Bills to prohibit local governments from charging accident response fees have been introduced in Arizona, California and Michigan.

The Harris Interactive survey was conducted for PCI by telephone within the U.S. between January 12th and 16th, 2011 among 1,428 adults aged 18 or older. This data was weighted as necessary to bring them into line with their actual proportions of the population.