Okla. Governor Signs 'Cash for Crash' Ban

Sean P Carr

OKLAHOMA CITY

 

Oklahoma became the latest state to ban localities from applying accident-response fees when law-enforcement personnel respond to the scene of a car accident.

Gov. Brad Henry signed H.B. 2013 on May 31, making Oklahoma the seventh state to enact a ban on what critics call the "crash tax." Sponsored by Rep. John Wright, R-Tulsa, the bill bars municipalities from levying fees for responding to or investigating a motor-vehicle accident. The measure passed the Senate unanimously and in the House with just one vote in opposition. The bill went into effect immediately.

Joe Woods, assistant vice president and regional manager for the Property Casualty Insurers Association of America, said the bill ends what he described as "cash-for-crash" schemes. Local governments in Tulsa and Shawnee have proposed assessing accident-response fees in order to help balance their budgets.

"With this new law, local government budgets will not be balanced on the backs of automobile accident victims in Oklahoma," Woods said in a statement. "Public safety is a basic role of government and motorists should not have to pay twice for emergency response services."

The Florida Legislature recently approved a similar ban, which is awaiting action by Gov. Charlie Crist (BestWire, May 4, 2009). Arkansas, Georgia, Indiana, Missouri, Pennsylvania and Tennessee have each done so within the past two years (BestWire, April 1, 2009).

In many cases, third-party collection services have promised municipalities large returns, in exchange for a cut of the fees (BestWire, March 9, 2009). Various state studies commissioned by insurance and third-party collection sources have reported that from 44% (Florida) to 82% (Ohio) of insurance companies do not pay the fees (BestWire, April 1, 2009).

The top five writers of private passenger auto insurance in Oklahoma in 2008, according to A.M. Best state/line product information, were: State Farm Group, with 21.7% market share; Farmers Insurance Group, with 17.7%; Allstate Insurance Group, with 8.3%; Oklahoma Farm Bureau Group, with 7.7%; and Progressive Insurance Group, with 7.3%.

(By Sean P. Carr, BestWeek: sean.carr@ambest.com)

Copyright (C) 2009 by A. M. Best Company, Inc.