Utah Legislature Approves Ban on Accident-Response Fees

car accident sceneLocal governments across the country are increasingly instituting flat-fee structures used to bill drivers for police and fire departments’ response to traffic accidents. But legislation on its way to the governor’s desk in Utah would impose a ban on the practice throughout that state.

Accident-response fees—known more commonly throughout the insurance industry as “crash taxes”—are a result of municipalities’ growing difficulty in keeping public safety departments adequately funded. In order to establish a new flow of revenue, many of these struggling public entities have instituted the fees to reclaim some of the cost of securing accident scenes.

But the practice has sparked heated debate over whether the fees amount to double taxation, deter tourism and have the potential to restrict access to low-cost auto insurance.

The opposition has spread widely, with Utah becoming the 11th state to pass legislation that restricts the fees in some way.

Utah’s ban, however, does not totally limit public entities’ ability to levy the fees on drivers and their insurance companies.

Instead of completely removing public safety departments’ ability to seek compensation for response to an accident, the legislation designates the types of cost that can be recovered from at-fault drivers and says that drivers can only be charged for the actual cost of responding to the accident.

Fees can still be assessed for the cost of transporting and treating individuals involved in the accident, damages to public property, towing costs and the cost of materials used in cleaning up the accident scene.

But a flat-fee structure—like the one recently implemented in the capital of California—cannot be used in assessing the cost to the motorist.

Sacramento’s fee schedule gives some perspective on just how much motorists are being charged for a city’s response to their accidents. It goes from $435 for “scene stabilization and hazardous materials assessment” up to $2,275 for air response to an accident. In addition, it lays out a $400 per-hour rate for engine companies’ response and a $275 per-hour rate for the “command and control unit,” among other things. Utah entities would be banned from setting schedules like this.

The bill was overwhelmingly approved in both houses of the state legislature. The senate approved it by a vote of 28-0, and the house vote was 72-2.

 

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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