Photo of an old car accident.
"Crash tax" may soon be a common term in the auto insurance industry. CC by James Salmon/Wikimedia Commons

Nothing good usually comes of car crashes — unless you hate the car you drove and no one got hurt, but even then paying the deductible can sting. If dealing with an accident that includes physical repercussions and massive expense isn’t an unpleasant enough contemplation, there is something new to make it worse. It’s called a crash tax, and it is not winning any fans among regular citizens. If a people get in car crashes outside the municipality they live in, and EMS shows up, they get billed, and it’s no small fee.

‘Crash tax’ can be assessed regardless of fault

The “crash tax” is not complicated. A person gets billed if EMS services even show up at the scene of an accident away from home. The bill is not astronomical. However, it is far from reasonable. The norm seems to be a few hundred. There was a recent Chicago Tribune piece about a woman charged $350, and the New York Times had a story of a man charged $200. Neither asked to be checked out by emergency personnel or needed to go to a hospital.

Some states banned it

Several states have banned the practice, though they are a minority. Ten states, being Alabama, Arkansas, Georgia, Florida, Indiana, Louisiana, Missouri, Oklahoma, Pennsylvania and Tennessee got rid of the practice. However, often the decision is not made at the state level, but by municipalities. The idea is to recover funds from people who live elsewhere for emergency services. Some refer to it as “resource recovery.” Currently, municipalities in 24 states have the crash tax, and fees are especially steep in California.

Insurance does not cover it

If a person declines medical assistance, an insurance company will not pay for it. Insurance companies across the board oppose the crash tax. There are several other groups, including the AARP, which oppose the crash tax.

Sources

NY Times: http://nytimes.com/2010/09/05/automobiles/05CRASHTAX.html?pagewanted=1&_r=1&ref=automobiles

Chicago Tribune: http://articles.chicagotribune.com/2010-03-02/business/ct-biz-0302-problem-locklin-20100302_1_billing-ambulance-services-emergency

Sacramento Injury Board: http://sacramento.injuryboard.com/automobile-accidents/can-crash-tax-help-to-reduce-the-rate-of-accidents.aspx?googleid=284322

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