New York’s fire department proposes unpopular “Crash Tax”

insurance news Staten Island Fire Dept Under Pressure

The Stanton Island City Council has been pushing around a new proposal that is being referred to as, “crash tax

This new fee will be assessed to both drivers, whether at fault or not, and can become effective as early as this July. The FDNY will charge $490 to each driver involved in accidents resulting in injuries, $415 for vehicle fires and $365 for just showing up.

In a statement from FDNY spokesman Steve Ritea, “The intention here is to take the burden off of taxpayers and make the parties responsible for accidents pay for the services.”

Some predict these new fees will be paid by insurance companies but whether this happens or not is still to be determined. Currently, most insurers do not pay for extra fees of this nature and would cost the industry as estimated $1 million a year. Insurance companies could very well reject covering the added expense.

The insurance industry sentiment, along with New York citizens, rang through out to the same tune – a moment to mark in history. When asked, many residents feel this is a form of double taxation and that accidents are just an unforeseen event.

The department has found themselves in deep debt and is using whatever means necessary to keep from closing firehouses down. There are two other plans in the works to generate funds besides the crash tax. One being, a charge for $25,000 to non public hospitals for the use of the city’s 911 system and another, selling bad debt to outside collection agencies. It would appear that many are going without paying their ambulance bill, costing the department close to $50 million a year.

In turn, if the higher fees fall on insurers to pay, then eventually this will reflect in higher rates to consumers. Many joke that soon you’ll see ATM machines on fire trucks…a joke that may be a reality soon.

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