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Florida Bans ''''Crash Tax'''' Fees

 

Thursday, Jun 18,2009, 11:46:56 AM   Click:

Florida Gov. Charlie Crist signed legislation banning local governments from charging fees when public safety personnel respond to the scene of an accident. Welcomed by insurers, the legislation was criticized by towns and cities that had assessed the fees in an effort to balance cash-strapped budgets.

Crist's signature on S.B. 2282 made Florida the eighth state to ban such fees. Arkansas, Georgia, Indiana, Missouri, Oklahoma, Pennsylvania and Tennessee have done so in the past two years (BestWire, June 1, 2009). The state Senate unanimously passed S.B. 2282, 39-0. The state House of Representatives backed the bill in a 102-15 vote.

The new law prohibits local governments from levying the accident-response fee on the driver or owner of a motor vehicle, the insurance provider or any other person for the response or investigation at the scene of a motor vehicle accident. It will not affect hazardous material clean-up or ambulance services, including air ambulance (BestWire, May 4, 2009).

To insurers, such "crash tax" fees were a form of double taxation, as first-responder services are paid for through taxes.

"We are pleased that with his signature, the governor has put an end to what was becoming a more frequent practice by local governments across the state," said Julie Pulliam, regional director of public affairs for the American Insurance Association.


Earlier this year, the Tallahassee, Fla. City Commission approved fees of $400 to $700 for when the fire department responds to the scene of an accident. Nancy Herndon, chief of planning and logistics for the Tallahassee Fire Department, said as a user fee assessed on those who need the service, it is fair. Herndon added, "A car crash is beyond that realm. It is not a basic service" (BestWire, March 4, 2009).

"Car accidents should not be a revenue opportunity," William Stander, assistant vice president and regional manager for the Property Casualty Insurers Association of America, said in a statement. "Local government budgets will no longer be balanced on the backs of automobile accident victims."

The top five writers of private passenger auto insurance in Florida in 2007, according to A.M. Best state/line product information based on direct premiums written, were: State Farm Group, with a 21.9% market share; Berkshire Hathaway Insurance Group, with 14.5%; Allstate Insurance Group, with 14.1%; Progressive Insurance Group, with 10.7%; and USAA Group, with a 4.9% market share.

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

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