Accident victims could have crash tax to go with deductible

Photo of a car that his a house.

“Crash Tax” may become an everyday car insurance term. CC by Blyzz/Flickr

As if dealing with physical repercussions, expensive deductibles and all of the other ramifications of an auto accident weren’t enough, emergency service departments are tacking on another expense. It’s called a crash tax. Motorists involved in a car crash outside their municipalities may be billed by Emergency Medical Services just because EMS showed up at the accident.

Fault doesn’t matter to the ‘crash tax’

The “crash tax” is not complicated. If a person gets in a car crash away from home, and emergency services shows up and checks them out, even if they don’t ask for it, the person gets billed. The bill isn’t gargantuan, but is far from being innocuous. Often, the bill isn’t into the thousands. 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 bans in place

More states have crash taxes than not. However, the number of states with a ban on the crash tax is growing. Ten states — Alabama, Arkansas, Georgia, Florida, Indiana, Louisiana, Missouri, Oklahoma, Pennsylvania and Tennessee — got rid of the practice. It isn’t a state law though. It is almost always a municipal decision. The practice, also called “resource recovery,” is used to get funds back from people that needed emergency services but didn’t pay taxes in that area. There are 24 states that have it. The highest fees in crash tax bills are, of course, in California.

You wish insurance covered this

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

More information on this topic

NY Times

Chicago Tribune

Sacramento Injury Board

  • Abe

    But if the accident is NOT their fault and they DO NOT require emergency service, why should someone be charged at all…!

    • PeterStone2112

      Basically, the thinking is that since a party in the accident is not from the area where the accident takes place, they therefore don't contribute to local taxes that pay for fire, police, and EMT services. Thus, they should have to shoulder some of those costs. That isn't necessarily to say that it's fair, nor that everyone has had to pay it – some people have successfully been able to argue their way out of it.

  • Stephen Satinsky

    I was talking with my co workers and we are going to make sure we know which states have that tax and make sure our Tourisim $$$ never are seen in those states. The crash Tax WILL HURT TOURISIM FOR THOSE STATES

    • PeterStone2112

      It is doubtful that a crash tax could dent tourism in any way shape or form. The reasoning behind crash taxes is that since it costs a lot (and it does) to send emergency personnel to the scene of an accident, that money is essentially lost because the party receiving treatment doesn't contribute to local tax revenues. The tax is also used by a lot of municipal areas in California, which is one of the most popular tourist destinations in the Lower 48 – I sincerely doubt that people will stop going there because the crash tax exists.
      Also, crash taxes are almost always imposed on the municipal level, not the state level, and the most common state legislation or proposed state legislation is actually to ban crash taxes.

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