Auto Insurance Association Opposes Sacramento Crash Tax

Blue hondaThe Association of California Insurance Companies (ACIC) is voicing opposition to a proposed “crash tax” in Sacramento, which they say could  lead some California car insurance companies to increase premiums if signed into law. Under the proposed law, non-city residents who get into an accident in Sacramento that requires an emergency response would be hit with a fine.

The measure was approved by a Sacramento City Council committee on Tuesday and will now go to the full city council for a vote.

According to KCRA, fines for non-residents could range “from $435 for routine crashes to more than $2,000 for crashes with hazardous material clean up and helicopter transport.”

The funds generated by the tax would help cover expenses associated with having police and fire departments on hand when accidents occur. The income from the tax could help close the city’s $43 million deficit, reports the Sacramento Bee.

Drivers do not need to worry about the potential expense, Sacramento fire captain Johnathan Burgess told Capital Public Radio. The “crash tax” would be covered by most auto insurance companies, he says.

ACIC contends that it’s misleading to tell the public that their auto insurance company will foot the bill.

“We think that cities and counties and other districts that impose these fees on drivers are really on very shaky grounds,” says Sam Sorich of ACIC. “On one hand he or she finds themselves in an accident, on the other hand they get a bill in the mail for perhaps several thousand dollars requiring them to pay for the city’s cost.”

Sorich stated that, if insurers do have to cover costs from the crash tax, then the costs might ultimately be reflected in raised rates.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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