Filed Under:Carrier Innovations, Regulation/Legislation

Va. Senate Committee Gives Thumbs Down on Crash Tax

The commonwealth of Virginia’s Senate General Laws Committee defeated a bill that would have allowed local municipalities to bill insurers for emergency services at crash sights.

The bill, SB 881, would have allowed volunteer fire and emergency services departments responding to emergency automobile accidents.

Under the bill, often referred to as a crash tax, insurers would have been required to offer coverage as part of their auto policies. Mandated coverage would have been no less than $250. The amount billed by the municipality would not have exceeded the coverage.

The charges for emergency response would be made only by volunteer fire and EMS services that were not fully funded by taxes.

The legislation would have been an amendment to current law governing the operation of emergency services vehicles and billing for services.

The bill was defeated by a vote of 6-9.

“Accident response fees are a form of double taxation,” says Erin Collins, state affairs manager for the National Association of Mutual Insurance Companies in a statement. “These fees are charged for services that are covered by taxation, not by forcing policy coverage where it may not exist. By their nature, accident response fees punish insured drivers for following the law and getting insurance while the uninsured receive no such bills for police and emergency services. NAMIC applauds the committee for their foresight in recognizing this detrimental practice and voting to stop SB 881.”

In an interview, Collins says that while the state Senate has defeated the measure, a piece of legislation remains active in the House, but the status of that bill is not certain.

So far, 13 states have banned the practice of billing insurers for emergency services for an auto accident.

In April, Arizona outlawed the practice and at about the same time New York City backed off a plan that would have allowed the city to charge for emergency services when called to an auto accident. 

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