"Crash Tax" may become an everyday car insurance term. CC by Blyzz/Flickr

As if dealing with physical repercussions, expensive deductibles and all of the other ramifications of an auto accident weren’t enough, emergency service departments are tacking on another expense. It’s called a crash tax. Motorists involved in a car crash outside their municipalities may be billed by Emergency Medical Services just because EMS showed up at the accident.

Fault doesn’t matter to the ‘crash tax’

The “crash tax” is not complicated. If a person gets in a car crash away from home, and emergency services shows up and checks them out, even if they don’t ask for it, the person gets billed. The bill isn’t gargantuan, but is far from being innocuous. Often, the bill isn’t into the thousands. The norm seems to be a few hundred. There was a recent Chicago Tribune piece about a woman charged $350, and the New York Times had a story of a man charged $200. Neither asked to be checked out by emergency personnel or needed to go to a hospital.

Some bans in place

More states have crash taxes than not. However, the number of states with a ban on the crash tax is growing. Ten states — Alabama, Arkansas, Georgia, Florida, Indiana, Louisiana, Missouri, Oklahoma, Pennsylvania and Tennessee — got rid of the practice. It isn’t a state law though. It is almost always a municipal decision. The practice, also called “resource recovery,” is used to get funds back from people that needed emergency services but didn’t pay taxes in that area. There are 24 states that have it. The highest fees in crash tax bills are, of course, in California.

You wish insurance covered this

If a person declines medical assistance, an insurance company will not pay it. Insurance companies oppose it. There are also other groups, including the AARP, which oppose the crash tax.

More information on this topic

NY Times

Chicago Tribune

Sacramento Injury Board

When it comes to having more payday cash, it’s important to look thoroughly at your monthly bills. One area where people frequently find savings is in the area of car insurance. Everyone needs car insurance, but the cost varies greatly among companies. When making the decision of whether or not to look elsewhere, there are some key things to look at.

What to look at before jumping ship

For those who have changes in their lives, shopping around for new auto insurance can be a sure-fire way to lower monthly payments. Here are some reasons why you should look for new quotes:

• You were laid off or are self-employed. If the miles on your vehicle are significantly changed, that could mean a drop in premium. Many rates are based on to-and-fro miles of commuting from home to work. Those who are laid off or work out of their homes can find rates cut down due to the slashed mileage.
• Your credit score has changed. Many auto insurance providers base your premium on your credit score. If yours has improved over the past few months, you may be eligible for a break when it comes to payments. On the other hand, if your credit score has declined, there are insurance companies that weigh other things, like driving records, more heavily when deciding on a premium.
• You have a long-term car lease or loan. One of the repercussions of lowered credit scores and higher payments is lenders extending loans’ life spans. It’s not uncommon for car leases and loans to extend out 72 or even 96 months. Although the payments are lowered, the consumer ends up having to finance most of the vehicle’s cost. As time goes by, the vehicle’s value declines and many owners end up with an “upside down” loan, which means they owe more than the car is worth. One accident could mean the insurance company pays out the car’s market value and the owner owes more than that to the finance company. That could mean all payday cash has to go directly to the lender. A good solution is for consumers to look into getting gap insurance. This bridges the gap between the insurance company payout and what is owed on the loan.
• Children start driving. An insurance company that has traditionally offered reasonable rates can increase the premium once an additional driver is added to the policy. If your children have reached the driving age, it’s a good time to search around and find some insurance options. You may not switch, but you may find a better price elsewhere.
• You become a homeowner. Buying a home makes you more responsible in the eyes of many insurers. If you buy, be sure to talk to your agent and find out if they have different rates once you move from the renter to owner classification. You could end up saving money not only due to a lowered auto insurance premium, but also due to combining premiums for home and auto, for example.

Maximizing revenue

It’s the little things that add up to savings for consumers these days. Having more payday cash comes from examining small expenses. For example, it is more likely to be able to cut down on an automobile insurance bill than it is to totally refinance a home loan. Consumers looking for more money at the end of the month should start small and hope for the best.

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Image courtesy of All American Auto Insurance

While this summer isn’t seeing the frighteningly high gas prices we were dealing with just a year ago, much of the country is unseasonably warm, and those who don’t feel like their air conditioning bills eating away their income are just as likely to be pinching pennies for other reasons. You may not be able to control the weather, but one thing you can control is how much you pay for auto insurance.

5 Ways to save money

Whether you’re shopping for a brand new policy or considering a change in companies when your renewal is due, here are five ways you can save money when shopping for auto insurance rates:

1. Have a Clean Driving Record. It may seem obvious, but if you haven’t racked up any tickets or been in any accidents in the past three-to-five years, you can save a significant amount of money on your auto insurance premium. As a renewal customer, you may be eligible for an automatic drop in rates as your clean driving record lengthens. As a new customer, you’ll qualify for lower rates from the start.
2. Consider a Higher Deductible. The size of your premium is inversely proportional to the size of your deductible. What that means, is that a higher deductible gives you a lower premium. How much lower? Well, increasing what you pay out of pocket from $200 to $500 could net you a 30% savings, and if you go all the way to $1,000, you could be shrinking that premium by more than 40%. Of course, you should never agree to a deductible that is more than you can comfortably pay should you file a claim.
3. Consider What You Drive. Many people don’t realize this, but what you drive absolutely impacts your insurance premiums. For example: if you have an older, paid for car, you may want to reduce or eliminate comprehensive and/or collision coverage. On the other hand, if you have a newer car that is still under a lease or loan agreement, you’ll need to have full coverage but you’ll likely be eligible for discounts if you have modern safety features like anti-lock brakes, a full complement of airbags, and an anti-theft device.
4. Bundle Your Home and Auto. If you look to one company to carry both your auto and homeowners insurance, you’ll save around five percent with most insurers – some offer even more. You can increase that savings if you also add a life insurance policy to the mix.
5. Discounts, Discounts, Discounts. The key to really saving money on insurance is to ask about discounts. Some of the most common include:
   • Low mileage – if you drive less than 14,000 (in some cases, 10,000) miles a year
   • Good grades – if you or your son or daughter is a full-time student under the age of twenty five, with a B-average or better, you can save up to 15%
   • Defensive driving – if you take a class, and it’s NOT to erase a ticket, you can get a discount of 5-10% that lasts up to three years (at which point you are usually free to take the class again).
   • Mature driver – If you are over fifty, you may qualify for a discount.
   • Hybrid cars – some insurers offer discounts for hybrids, to help offset the generally higher cost those cars incur.

And still more savings

While these are just a few of the ways you can save money while shopping for insurance rates, you should always shop early, and shop around. Some insurers offer a discount if you buy a new policy with them before your old policy is in danger of expiring, and all insurers have slightly different rates and discounts. Always make sure you ask questions, and always get your quote in writing.