This was printed in the Battle Creek Enquirer 5/31/06.

Bill Policy May Drive Up Insurance Premiums

A recent article, "Fire Bills Catch On," indicates that some municipalities in the Battle Creek area are currently charing or considering billing for fire and police response to fires and traffic crashes.  While these fees are intended to raise revenues for local municipalities, they may have the unintended consequence of raising residents' insurance premiums.

Many insurance companies do not pay municipal accident response fees because they are not covered in the policy.  If insurance companies begin paying these fees then they will have to collect a premium from their policyholders, driving up the cost of auto and home insurance.

The policy of charging for police and fire department response may not only increase insurance premiums, it penalizes those citizens who have insurance.  Pennfield Township representatives said in the article that they are only billing insurance companies of township residents.  It doesn't seem fair that uninsured drivers who break Michigan law or those who choose not to insure theirhome will not be charged these fees.  In fact, there may be serious constitutional questions in the practice.

Municipalities are attempting to get insurance companies to subsidize their budgets by asking them to pay for police and fire department runs to accidents.  Some municipalities are only assessing non-residents because they realize that residents are already paying for this service through their local taxes.  There is nothing like hanging out a "not-welcome" sign to those coming to the community to work or shop.  They will only get out of paying the bill if they are breaking the law and driving uninsured.

There is also a question regarding lack of consistency in the fees being charged and the criteria for sending firefighters and police officers to crashes or fires.  The cost and guidelines vary by city and there for it makes it difficult for insurance companies to forecast these fees.

The bottom line is that residents should have a choice in this matter.  After all..they will be paying the price in the end.

Sincerely,

Pete Kuhnmuench, Executive Director, Insurance Institute of Michigan