Key Issues : Municipal Emergency Response Fees
The Growing Trend Of Municipal Response Fees
Municipalities in Michigan and other parts of the country are attempting to raise revenue by charging new fees to insurance companies each time the police or fire department responds to an auto crash. These municipal accident response fees are in addition to taxes already by residents in those municipalities. While the insurance industry recognizes the crucial role that fire and police services have in the safety of our communities, these fees are not a fair or equitable distribution of the costs of these public services.
Generally, auto insurance policies provide coverage for auto accident medical expenses, including ambulance transportation to the hospital, but do not cover fees for fire and police response to the crash scene. It is not logical for insurance companies to pay for services not covered in auto insurance policies. Providing coverage for police and fire response would likely result in incrased costs that would be passed along to policyholders.
As part of their duties, police and fire officials respond to and investigate auto crashes. While some municipalities and billing fee companies charge that insurance companies should pay because they are the sole users of police reports, it is just not true. Key beneficiaries of crash reports include personal injury lawyers, hospitals and health care providers. The reports are also used by state and local law enforcement for criminal investigation, statistical reporting and local media for news reports.
Some collection agencies tout emergency response fees as revenue generators to municipalities across the state. These organizations tell local government officials that there is a huge pot of money available from auto insurance companies. But in reality, local government is asking your insurance company to pay for a service that is already funded by taxes paid by local residents.
In some cases, municipalities are only assessing non-residents because they realize that residents are already paying for this service through their local taxes. There is nothing like hanging the "not welcome" sign to those coming to the community to work or shop. They will only get out of paying the bill if they are breaking the law and driving uninsured.
There is also a question regarding lack of consistency in the fees being charged and the criteria for sending firefighters and police officers to crashes or fires. The cost and guidelines vary by city and therefore makes it difficult for insurance companies to forecast these fees.
If this growing trend of charging for police and fire response continues and insurance companies are forced to provide coverage, consumers will pay more for their auto insurance.
Another source of information is the Ohio Insurance Institute's website.