The City Council of Missouri City, Texas, has passed an ordinance to assess a fee of $500.00 to $2,000.00 to cover the cost of fire and police first responders who respond to an accident. The fee will purportedly be billed directly to the insurance carrier of any person found at fault for a motor vehicle accident, vehicle fire or illegal burning. The fee supposedly is only to be assessed against the insurance company if the at fault person and only if a claim is opened by a motorist or a company. How they are going to know if someone else opened a claim remains to be seen.
According to the ordinance, there are four levels or “tiers” of fees to be assessed. These will be as follows:
Tier I Events
The City will charge a fee of $500 to insurance companies for responding to:
- Motor vehicle collision with minor damage and without injuries
- Hazardous material spill that does not require the response of a hazardous materials team
- Illegal burning
- Motor vehicle fire
Tier II Events
The City will charge a fee of $650 to insurance companies for responding to:
- Motor vehicle collision with injuries
- Collision involving a motor vehicle and a pedestrian
- Motor vehicle fire requiring the response of a fire investigator for investigation
Tier III Events
The city will charge a fee of $1,000 to insurance companies for responding to:
- Motor vehicle collision with an extrication
- Collision involving a motor vehicle and a building
Tier IV Events
The City will charge a fee of $2,000 to insurance companies for responding to:
- Motor vehicle collision with a fatality
- An event requiring the deployment of a specialized team
There will also be itemized fees billed for costs associated with hazardous material clean-ups that the city must respond to.
Missouri City is not the first city to do this. This is a growing trend across the United States. However, many states have reacted to this practice by imposing a state-wide ban, including: Georgia, Tennessee, Missouri, Pennsylvania, Indiana, Louisiana, Arkansas, Oklahoma, Florida, and Alabama. Additionally, Kansas, Arizona and Utah place limitations on fees to actual costs and Virginia defeated a bill that would have allowed cities to bill insurers crash response fees. I suspect that Texas will eventually follow this suit in light of the large influence insurance companies have upon the laws in this State.
These laws raise an interesting legal issue in Texas. Under Texas law, most auto insurance policies cover any judgment or damages that you are “legally obligated to pay.” If the ordinance specifically states that insurance companies will be billed but that the driver’s will not be obligated to cover it regardless of whether the insurer pays, why would the insurer pay? After all, the driver can never be legally obligated to pay it so it is not a covered claim. Perhaps Missouri City will find itself hiring a car accident attorney to pursue their claims for these questionable fees.
It will be interesting to see how this new law pans out in Texas. It goes in to effect on March 1, 2013.