Car Insurance Cos. to Be Billed for NYFD Emergency Responses

New York skyline aerial viewDays after a small city in New Jersey announced that it would start issuing bills for its fire department’s responses to car accidents, the largest fire department in the nation — the New York Fire Department — has announced that it will be doing the same.

According to the Wall Street Journal, the New York City Mayor and the FDNY Commissioner back a program, which would start July 1, to hit drivers involved in a car accident with a fee of at least $365 per vehicle if the FDNY responds.

Like most of the accident-response fees that have been considered or instituted over the country, the idea comes as a response to an ever-tightening city budget.

According to the Wall Street Journal, motorists who cause serious accidents would be required to pay $490 for a response to a vehicle fire or other incidents with injuries, $415 for a vehicle fire with no injuries and $365 for a response to an accident in which there is no fire and no injuries.

Unlike most other accident-response fee frameworks, New York’s plan would not be limited to out-of-town motorists, and bills would be delivered to the person who caused the accident — not directly to his or her car insurance company.

The FDNY, though, will reportedly show some flexibility in which accidents result in bills and which ones do not.

“If we’re talking about an act of God situation, a tree falls on car, then we have discretion, obviously not to bill in those cases,” a spokesman for the FDNY told the Wall Street Journal. “If the accident is exceedingly minor, we show up on scene and nobody needs medical assistance and there’s no fire or anything like that, then, we have discretion.”

Although residents will be able to attempt to pass on the bill to their insurance companies, whether or not it will get paid is a toss up.

In a report that was delivered to the Florida Senate in 2008, a member of the industry that administers the distribution and collection of these fees reported that just over half of the major insurers in the country agree to pay the fees.

The report says that, “Several large insurers question the validity of the fees and refuse to pay them, arguing they are improper user fees since local residents already pay for these services through property taxes.”

It is this last point — the allegation of double taxation — that has infuriated opponents of the fees. Proponents of the practice say that it in the end is not double taxation, since, they say, an insurance provider would likely end up footing the bill. But even in this scenario, opponents contend that drivers still end up getting hurt financially since they may see a consequent premium increase as a result of the heightened claims costs.

At least 10 states — including Florida — have effectively banned their municipalities from instituting this type of fee.

Whether New Yorkers go along with the plan is yet to be seen. The Wall Street Journal reports that their will be public hearings on the fees, but also that Mayor Bloomberg in the end requires no formal approval to start the billing process.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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