Accident Response Fee Facts

We’re again seeing an uptick in interest on the issue of accident response fees. Such fees can appear an attractive alternative to raising local taxes for budget-constrained municipalities. In short, some municipalities are attempting to bill insurance companies for police or fire department responses to auto accidents. This practice is a growing trend in a number of Midwestern states, including Michigan, Ohio and Wisconsin, as well as other states like Kentucky and Florida. Indeed, several cities and municipalities have passed ordinances permitting the collection of such fees. In some cases, third party fee companies are encouraging the practice by soliciting municipalities for the collection of accident response fees.

We note that the response to and investigation of auto accidents has long been handled by police and fire departments, supported by local taxes. Such response services have never been covered or charged for in auto insurance policies. If insurers are to be expected to pay for services historically supported by local taxes, then going forward this additional cost component will have to be factored into auto insurance policies. For more information, check out the I.I.I. primer on municipal accident response fees. Further resources are available at www.accidenttax.com and www.accidentresponsefees.com  

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