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$400 Surprise: Town Bills Crash Victims

14.11.2006 00:55 Insurance News

Drivers involved in crashes might get a bill for police responding to the crash in some Indiana communities.

A company that collects the fees for police agencies said it's a growing trend, but the insurance industry said it believes it's an illegal tax, Call 6's Rafael Sanchez reported.

The town of Cumberland in Marion County is one small community that has implemented a plan to charge people involved in crashes. The town specifically targets out-of-towners, who police said are responsible for most of the wrecks. Since March, the town has billed 33 drivers.

"We believe it's right, what we are doing, or we wouldn't be doing it," said Cumberland Police Chief Michael Crooke.

Crooke said the money generated will pay for things not covered by property taxes, such as replacing aging radios and training costs.

Cumberland collects the fees through an Ohio-based company called Cost Recovery Corp. That company handles the billing and gets about a 10 percent cut from what it collects.

"Not only us, but everybody is going to have to look at different ways to try to generate income to be able to survive," Crooke said.

Elizabeth Kinder, of Greenfield, said her son was involved in a two-vehicle crash in Cumberland. She said she received a bill with no dollar figure but was asked by Cost Recovery to submit information that would let it charge her insurance company, which covers her son.

"I don't want the insurance to go up, and I didn't want to be dropped, either," Kinder said. "I thought that (going to an accident scene) was a public service that police departments provided."

Kinder was billed $409.50. Cost Recovery's fees included $15 an hour for two Cumberland officers who responded to the scene, an unknown fee for the use of police vehicles and a charge for paperwork.

The Indiana Insurance Institute represents the largest insurance companies with customers in Indiana, Sanchez reported. The group contends the fees are wrong.

"Why do you have taxes to pay for these services to begin with?" said Stephen Williams of the Insurance Institute of Indiana. "We don't want to be heading in the direction of a third-world country, where if you want something done, you have to pay it out of your pocket as they arrive on the scene."

Cost Recovery said the fees are an appropriate way to pay for police services used by nonresidents, and that its billing does not increase insurance rates.

Insurance companies with customers in Indiana won't pay the bill, Sanchez reported. So, it becomes an out-of-pocket expense.

The person who is billed is the one who police say caused the accident. An appeal of the bill must be made to the police agency or city council involved.

Some other small communities in Indiana have either dropped the program or decided not to pursue it.

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