INDIANAPOLIS – A bill advocated by the Insurance Institute of Indiana that bans municipalities from charging accident response fees passed the General Assembly on Wednesday. Pending Governor Mitch Daniels’ signature, Indiana will join Missouri and Pennsylvania as the first states to ban such fees.
Some local governments in Indiana and other states have voted to charge motorists a fee when police investigate traffic accidents, Insurance Institute of Indiana President Stephen Williams said.
"The passage of SEA (Senate Enrolled Act) 81 provides an important protection for Hoosiers," Williams said. "It guarantees they will not be double taxed by being charged for police responding to auto accidents. Essential services such as police and fire protection are already funded by local taxes, and these fees are just a chance for governments to take more of their citizens’ money."
Several vendors 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, however most insurance policies in Indiana do not cover these fees.
Since 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.
Griffith, in Lake County, had once adopted the ordinance pitched by Cost Recovery Corp. of Dayton, Ohio, which billed out-of-towners involved in an accident a fine of more than $200. Following much scrutiny, the Griffith Town Council eliminated the ordinance. Several other Indiana cities and towns have rejected the offer from Cost Recovery Corp. and thanks to the passage of SEA 81 there will be no need to consider such sales pitches.
"This legislation closes the door on out-of-state vendors who lobby for these ordinances with the intent of retaining a large cut by acting as a town’s collection and billing service," Williams noted.
Senator Dennis Kruse (R-Auburn) and Senator Ryan Mishler (R-Breman) co-authored the bill, and the 2007 session’s author Representative Ron Herrell (D-Kokomo) sponsored the bill and was instrumental in its passage.
"Indiana citizens who have already experienced a traumatic experience, such as an automobile accident, should not have to pay considerable amounts of money that tax dollars already cover in addition to the traumatic event," Representative Herrell said. "This is going to be a huge benefit to the citizens of Indiana."
The General Assembly passed this bill in 2007, but the bill was vetoed due to unrelated amendments that were added to the legislation.
The Insurance Institute’s efforts were also supported by the American Insurance Association (AIA), Independent Insurance Agents of Indiana, Inc., National Association of Mutual Insurance Companies (NAMIC), and Property and Casualty Insurers Association of America (PCIAA).
The Insurance Institute of Indiana is a non-profit trade association representing insurance companies in the state of Indiana. Its ultimate purpose is to create and maintain a business, legislative and public awareness climate in Indiana that promotes the continued success of the insurance segment in the free enterprise system. Visit us on the web at