The Pennsylvania Senate Local Government Committee has unanimously approved legislation to prohibit municipalities from charging a fee when the police department is called upon to respond to a motor vehicle accident.
The bill, H.B. 131, has the strong support of the Property Casualty Insurers Association of America (PCI). According to the group, the legislation is needed to stop local governments from seeking to balance their budgets "on the backs of insurance customers."
"Accident response fees are unfair to consumers and could ultimately result in higher insurance rates," said Angela Zaydon, regional manager and counsel for PCI.
Ms. Zaydon said there is a growing trend for cash-strapped local governments to seek new revenue streams.
"Third-party vendors are taking advantage of these municipalities by promising large windfalls if they bill insurers for providing emergency services following an accident," she said. "However, these fees in essence create a hidden tax that increases the cost of insurance without providing additional benefits for consumers."
The Pennsylvania House passed a similar bill last month, and it will now face its next test at the Senate Appropriations Committee. Gov. Edward Rendell has not expressed an opinion on the issue, Ms. Zaydon said.
Two Florida cities, Tampa and the town of Davie, recently dropped plans to consider accident response fee proposals.
"At the most basic level, these proposals amount to a form of double taxation," said Ms. Zaydon.
Earlier this year, the Indiana Legislature passed a bill (H.B. 1274) to ban these fees. However, it was vetoed by Gov. Mitch Daniels, who expressed concern about a section of the bill addressing charges for vehicle accident reports. Indiana lawmakers will have an opportunity to override the veto in November.
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