Position Paper

Position Paper
Municipal governments are under tremendous pressure to balance budgets without increasing taxes. As a result, some third party vendors are attempting to capitalize on this situation by promising local governments large windfalls if they enact a service fee charge back program when their police or fire departments are called upon to respond to an automobile accident. Some of these businesses are erroneously advising local municipalities that emergency service costs are covered under insurance contracts in all cases, and insurers, with the assistance of these third parties, are being billed directly by the emergency service providers. The automobile accident victims may not even be aware of the fee because the bill is generally sent to their insurance company. However, these municipal services are already paid for through property and other local taxes. By billing insurers for these services, local governments are imposing a hidden double tax on consumers that ultimately increases the cost of insurance.

Public Policy Position
Insurance groups such as the Property Casualty Insurers Association of America (PCI) support efforts to fight unilateral municipal government service fees charges backs for accident response services. Since communities base their tax structure on the cost of services provided, adding a fee as a source of revenue amounts to a form of double taxation. Accident response fees are unfair to consumers and will result in higher insurance costs. Additionally, PCI opposes legislative, regulatory or judicial mandates with respect to insurance coverage terms as an inappropriate governmental interference in the private contracting process (between insurer and policyholder).