NU Online News Service, Dec. 10, 3:16 p.m. EST

Count New York City among a growing number of municipalities in the United States looking to make up for budget constraints by seeking to charge motorists involved in an accident if they need the fire department.

The city plans to charge motorists close to $500 if the city's fire department has to come to their aid.

From the insurance industry's perspective, the practice is tantamount to "double-taxation," and many times, insurance policies do not cover the so-called "accident tax."

Bob Passmore, senior director of personal lines for the Property Casualty Insurers Association of America (PCI), said he understands why municipalities are looking for alternate sources of revenue, but the accident tax, also known as the crash tax, is "a back-door approach often driven by vendors in exchange for a cut of the proceeds."

New York Insurance Association President Ellen Melchionni said insurance premiums would increase if companies were required to pay for the accident tax.

"This is an unfair fee," she said. "We already pay for these services in taxes."

The New York City Fire Department will hold a hearing on the fees next month, but it is not clear whether they need approval from the city council to begin assessing the accident tax on July 1.

Calls and an e-mail to the FDNY were not immediately returned.

Ms. Melchionni said the department plans to charge $490 to respond to a vehicle fire or any other incident with injuries. A vehicle fire without injuries will cost the auto owner $415, and the department will charge $365 to get to the scene of incidents without a fire or injury.

Reports have said the accident tax is aimed at those responsible for the accidents.

Mr. Passmore and Ms. Melchionni each called the proposal confusing because it does not outline how, or by whom, a driver is deemed at-fault.

The practice has been banned or at least limited in 10 states, Mr. Passmore said. Many times the tax is introduced and implemented only to be withdrawn once citizens react.

Mr. Passmore said it would be unfortunate for those involved in accidents to think twice about calling emergency services, knowing they'll be charged. But that may not matter. Mr. Passmore was called to take part in a story out of Chicago, in which a man was charged $200 for an ambulance to come to the scene of a scooter accident he was in. But he never called; a witness did.

Special Reports /

New York City Next To Charge Accident Tax

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