Institute Says Ind. First State to Pass Ban on Accident Response Fees

May 1, 2007

A bill to ban municipalities in Indiana from charging accident response fees (House Enrolled Act 1274) passed through the Indiana General Assembly on Saturday, April 28. Pending Governor Mitch Daniels’ signature, this prohibition is the first of its kind in the nation, according to the Insurance Institute of Indiana.

Proponents across the country are touting these fees to cities and towns as a solution to police funding woes. The vendors convince the local governing body to pass an ordinance allowing insurance companies to be billed when police come out to investigate a traffic accident.

Because most insurance policies in Indiana do not cover these fees, the bill is passed on to the citizen, who is surprised with a bill ranging anywhere from $200-$500. In Indiana, the towns of Cumberland, in Marion County, and Griffith, in Lake County, have adopted these ordinances. Several others, including Huntington, Indianapolis and Merrillville have rejected these fees.

“Hoosiers pay property taxes and other taxes to pay for these basic services,” Insurance Institute President Steve Williams said. “These vendors push some towns to bill their citizens again. This is not appropriate.”

Insurance companies have voiced fear that such fees would encourage people to leave the scene of an accident.

“An accident victim who is afraid of seeing a $400 police bill may leave the scene of an accident,” Williams said. “Any ordinance that encourages this behavior is bad public policy. The legislature has recognized this and addressed it strongly in HEA 1274.”

The Institute also said that the ordinances that the private vendors are convincing municipalities to pass also bring up several ancillary issues. First and foremost, they ask law enforcement officers to determine fault at the scene of the accident so the town can bill the at-fault driver. However, this violates the Constitutional right to due process that includes a trial by jury.

Several communities in Indiana have rejected a push to enact accident response fees, paving the way for this legislation. Several other states, however, have seen dozens of cities, towns and counties passing these ordinances. Pennsylvania is considering a ban, but has met some resistance.

The Indiana General Assembly, however, passed the bill with only one vote against it the entire legislative session. The final version of the bill passed the House of Representatives 93-1, and the Senate 47-0.

Representative Ron Herrell (D-Kokomo) authored the bill, and Senator Richard Bray (R-Martinsville) was the Senate sponsor.

“This is going to be a big benefit to the citizens of Indiana,” Representative Herrell said. “They will no longer have to pay these exorbitant fees simply to have accidents investigated. Our law enforcement officers are paid by taxpayer dollars, and they shouldn’t have to pay extra fees.”

House Enrolled Act 1274 also contains a section designed to keep the cost of crash reports in check. Under the law, Hoosiers can view reports at no charge, but must pay a fee to make a copy. The bill caps the fee at $8. In some parts of the state, law enforcement agencies have charged as much as $25 per report.

The Indiana State Police currently have a contract allowing a $12 charge for accident reports. This legislation does not affect that contract.

Source: Insurance Institute of Indiana

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