Pennsylvania House Approves Ban on Emergency Services Fees

May 22, 2007

The Pennsylvania House has voted 190 – 7 to prohibit municipalities from billing insurers or citizens a fee when a police department is called upon to respond to a motor vehicle accident.

The vote was cheered by insurers opposed to the fees, which are not covered by most policies. The measure now goes to the state Senate.

“Emergency response services are already paid for through property and other local taxes,” said Angela Zaydon, regional manager and counsel for the Property Casualty Insurers Association of America (PCI). “By billing insurers for these services, local governments are ultimately imposing a hidden double tax on consumers. Generally, insurance contracts don’t cover the payment of these fees, so it’s up to crash victims to pay. As a taxpaying citizen, it is not unreasonable to expect the local police departments to respond to an automobile accident without having to pay extra for this service.”

Insurers are watching as local governments across the country are increasingly seeking to charge a fee to property/casualty insurers for emergency response costs.

A number of communities in Michigan now charge extra for police and fire services used by nonresidents.

Radnor Township in Pennsylvania recently dropped its practice of billing for police services and refunded nearly $47,000 it had collected after complaints and bad publicity regarding the program.

Under Radnor’s plan, the fees were supposed to be recovered from insurance companies, but if they did not pay the company was seeking to collect from motorists.

Town leaders determined that the collection company was too aggressive in its collection practices. “It was time to admit it was a well-intentioned program, but it was implemented in the wrong way at the wrong time,” Radnor Township Commissioner William Spingler said.

Accroding to PCI, some third party 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. In some cases, this is being done pursuant to local ordinances. In other cases, the billing is being done unilaterally by local public safety officials. House Bill 131 would end this practice for police department charges.

Property Casualty Insurers Association of America

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