State Fee on Car Insurance Bills: Where Does It Go?

8:12 PM, Jan 11, 2013   |    comments
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BUFFALO, N.Y. -- If you've paid your car insurance bill lately, you probably did not notice the $10 dollar fee that is tacked on for the "mandatory NY Motor Vehicle Law Enforcement Fee." It is officially known as Section 9110 of the State Insurance Law. But one of our viewers named Mary did and contacted WGRZ - 2 On Your Side to ask us to look into it.

After checking with a variety of state agencies, we determined that the funds collected go to the New York Division of Criminal Justice Services and the New York State Police. The State Division of Budget puts the total fee amount collected at $119.1 Million for the fiscal year 2011-12. 

A spokesperson for the Division of Criminal Justice Services says they get a fixed amount of $4.7 Million. That money is then distributed in the form of grants to police and prosecutors here in Western New York and around the state. Those grants are used for car theft and auto insurance fraud investigations, training, and cases.

A state police spokesman says $9.1 Million of the fee goes into the Motor Vehicle Enforcement Account which is used for detection, prosecution, and reduction of insurance fraud and vehicle theft prevention. The remaining fund of nearly $105 Million dollars allocated to the state police are used for activities related to highway safety and public security according to a state police spokesman. The State Police Public Information Office also points out that this funding replaces budget money that had come from other revenue sources.

Budget Division spokesman Morris Peters says that it does not appear that any of this funding goes to the state general fund. We asked him if this is actually a transfer of funds of moving revenue from one agency to another.  He claims it is not and that the revenue from the fee is being used in accordance with the law.   

This fee has also been raised significantly through the years. It went from the original $1 dollar ten years in 1993 to $5 dollars in 2005 and then was doubled up to $10 dollars in 2009 which was the height of the state's budget crisis during the recession.

We will follow this story by contacting state lawmakers and the State Comptroller's Office to determine more about how the funds are spent.     


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