Drivers Beware of Crash Tax

California motorists beware: a growing number of local governments are out to drain more money from your wallet - this time if you are unfortunate enough to be in an auto accident within their jurisdictions.

The new money-making ploy is commonly called an accident or crash tax. These levies vary from jurisdiction to jurisdiction. But in many cases the taxes are imposed on non-residents regardless of who is at fault. So the bottom line is out-of-town motorists are victimized twice - once by being hit by a local driver and then by being taxed to pay for dispatched emergency equipment and personnel.

This scheme is not only sweeping California, but it is also growing in a number of other states. In fact, it has become so onerous that several states have banned local governments from imposing the crash tax. These states include Arkansas, Oklahoma and Florida.

Prompting the ban is concern that the local programs often result in double taxation since residents are already paying property taxes for such services. And for non-residents, it's taxation without representation since they have no say in the ordinances imposing the crash taxes.

In every respect, it is simply unfair to tax accident victims. It's true that in some cases, a victim's auto insurer will pay the tax. But not all auto insurance policies cover the tax. In those cases, the driver is on the hook for the tax, which can run into thousands of dollars.

And, if the trend continues, the tax will begin to affect the cost of insurance, ultimately driving up premiums. Among the local governments that have already approved crash-tax ordinances are Roseville, Fallbrook, CA and the Fresno County Fire Protection District. Several other local governments are now considering such ordinances.

The financial plight of local governments is understandable. But with the economy staggering and unemployment skyrocketing, taxing motorists -- and worst yet, accident victims -- is not the answer to increasing revenues.

If you are interested in this subject, please sign up and we will email you periodic updates on the latest developments about local governments that are imposing this onerous tax. We'll also let you know which agencies are considering the tax in the event you want to let your opinions be known.

So there is full transparency, you should know that we represent insurance companies and our primary concern in this matter is for you, our policyholders. We believe you should be fully informed on this subject because it directly affects you and what costs you may incur.