All eyes Kansas are on Governor Sam Brownback who has the power to sign into law this Monday a bill that could see cities and towns in the state being barred from charging drivers and their insurance companies for the cost of emergency response in the event of a car crash.
If the bill is passed and becomes law, Kansas will be the third state to ban the accident response service fees this year alone. In March it was the state of Utah and in April Arizona established a ban on what has been dubbed by the auto insurance industry: “crash taxes“.
Basically, any fee levied against a driver or their auto insurance company for the cost of the emergency response to their accident is deemed to be “crash tax” and with the new legislature is now banned. The driver can, however, still be charged by their municipality for the cost of things like ambulance fees or any other action taken by a state department to “save life, prevent suffering or disability or to protect and save property”. The bill only bans the cost of the emergency response to the crash.
It has been found that lawmakers in Kansas are generally behind the implementing of the bill, with the final vote in the senate being 34 to 5 in favor of the ban, and the final vote in the house was a mammoth 118 to 1.
State affairs manager, Mark Johnston of the Midwest region for the National Association of Mutual Insurance Companies, also praised the Kansas Legislature’s passage of the bill.
“This bill reaffirms the growing realization across the country, most recently seen in New York City and Tulsa, that accident response fees are improper double taxation,” Johnston said. “These fees are also a threat to public safety, as motorists involved in an accident may avoid contacting law enforcement or emergency responders because they are reluctant to incur a charge of several hundred dollars for doing so.”
Scrutiny of emergency response fees is not isolated to these three states and has been a topic of debate throughout the country recently.
The fees were initially implemented to take pressure off citys’ budgets, but it was argued that these fees actually serve as a form of double taxation; as residents already pay for the cost of the fire and police departments with their local taxes, and then are being charged again whenever they break down or have an automobile related emergency.
The fees have the bane of insurance companies for quite some time, and companies have lobbied at city and state level to have them banned. One group in particular, The Property Casualty Insurers Association of America (PCI), has made enough noise and the bill is finally on the brink of being ousted.
They claim that the end result of the fees is that they would ultimately preclude many people from affording inexpensive car insurance because most auto insurance providers do not cover municipal fees and those that do, increase the average claim size.
The PCI is working in many other states including California, lobbying for a similar ban to be passed; according to them there are twelve other states who are currently fighting to have these fees dropped.