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Drivers, look out for crash taxes

By Kay Bell · Bankrate.com
Wednesday, September 1, 2010
Posted: 4 pm ET

The Labor Day weekend is almost here and you're hitting the road for one last blast of summer fun. You've tuned up your car, plotted your route and have a little extra cash on hand to pay any potential crash taxes.

Yep. Crash taxes. These are fees that many cities and counties are charging drivers to cover the cost of sending emergency vehicles to auto accident scenes.

Crash taxes aren't new. They've been around for years, but are showing up in new locales as communities struggle in this tough economy.

Drivers, understandably, hate them. If they live in the area, then they're already being taxed to pay for police, fire department and ambulance services.

So, some places have limited the accident charges to out-of-town drivers who are involved in accidents. Still others, according to the Property Casualty Insurers Association of America, only target at-fault drivers or accidents that involve fires or spill cleanups.

I understand that approach. Why should a local politician tick off someone who could vote him out of office. That at-fault approach, however, could leave some room for arguments.

The truth of the matter, though, is that most places don't send the bill to the drivers. Rather, it's the insurance companies that get it.

And that, say crash tax opponents, is just as bad, because it gives insurance companies event more incentive to raise auto insurance rates.

Not surprisingly, California is at the forefront of this latest love affair with crash taxes. Nearly 40 local governments in California have either enacted or are considering such fees.

Sacramento city officials will debate a crash tax ordinance later this month. It's proposed fees would range from $435 for basic accident scene work to $2,275 for airlifting a wreck victim to a hospital.

If California's capital city does enact crash taxes, it would become the largest city in the country to pass such a fee, and opponents worry that would be enough to encourage other cities to do the same.

Some states, however, don't allow their lower taxing jurisdictions to enact such taxes. Since 2008, according to AccidentResponseFees.com, 10 states -- Alabama, Arkansas, Florida, Georgia, Indiana, Louisiana, Missouri, Oklahoma, Pennsylvania and Tennessee -- have outlawed accident response fees.

Personally, I understand the localities' desire to recoup some of their costs. But sometimes accidents do just happen and as part of civilized society, most cities, counties and their taxpayers have agreed to provide these public services. If they can't cover the costs, they need to do some soul searching budget evaluations rather than tacking on such backdoor taxes.

Have you ever been hit with a crash tax? Do you support them? For everyone involved in a wreck, or just those at fault or who don't live in the area where public money is being spent to deal with the wreck?

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4 Comments
Kristy
September 23, 2010 at 1:29 pm

Wow! The insurance companies are at the forefront of this debate, spreading misinformation and propaganda, and the public (sheep that we are) blindly follow their lead, chanting, no more crash tax! Does anyone realize that insurance companies are taking advantage of the mitigation handled by fire rescue, which in turn results in huge saving for the insurance company? Without fire rescue involved mitigating injuries and damages, the insurance company would loose countless millions. You don't hear them thanking fire rescue however do you? Think of how much your insurnace rates would go up, if fire resuce simply had to stop responding, due to insufficient funding. And yes, as scary as this is to hear, it is exactly what is happening today! Due to the fact that taxes DO NOT fund most volunteer dept operations, and due to the fact that for those that do receive some tax dollars, it isnt close to enough, fire depts are closing up shop. What does that mean for all of us? First, for us the general public, we can start to expect to be on our own, if injured in an accident, and we CAN expect to see our insurance rates go up ALOT! Why? Because there will be more injuries and more damage that will have to be covered. Do the math for yourself, and stop being a "Sheep". We must learn to think for ourselves and not just take everything that we are told, or read as the truth. There are so many deceitful, greedy companies out there, who use you, and you are letting them. Lets fire back at the real villans here, INSURANCE! Stop lying to us, stop charging us an arm and a leg, and mostly, STOP DENYING OUR CLAIMS! We have paid you for coverage, now shut up and cover our losses, as you promised. The insurance industry is a racket plain and simple and it is their job, to deceive us, and to try to NOT pay out for damage.

Shantique
September 02, 2010 at 2:51 pm

I would like to collect crash taxes myself...I would like these to cover the following:
my lost gas from wasting my time in traffic waiting for these things to be cleared
my lost time wated in the car (I can never get those precious moments back)
my lost salary for the inevitable loss of work time while stuck in traffic

This works for me!

Neil
September 02, 2010 at 11:04 am

Wouldn't a crash tax provide a disintentive to report an accident.