SB 95 creates an exception to the general rule that a towing company has a possessory lien in a vehicle until it gets paid for the tow.
In the case of non-consensual police ordered tows where an insurance company acknowledges responsibility for reasonable and customary charges for the tow, it requires the towing company to release the vehicle unless the towing company meets a number of requirements – proper licensure, proper insurance, and probably most importantly, registering a schedule of its fees with the local police post.
I think this is designed to address the situation where the towing company holds the vehicle and tries to gouge the insurance company. When the insurer won’t pay because the fees are out of line, nobody can get the vehicle away from the towing company which, in turn, allows the storage fees to continue accruing and compounds the problem.
The purpose of the possessory lien is to make sure the towing company gets paid. Either the owner comes up with the money or they have the vehicle as collateral. Where an insurance company acknowledges responsibility, the need for such a lien is greatly diminished. They can fight about what constitutes a “reasonable and customary” charge – in court if necessary – and once that number is settled, the insurer is going to have the wherewithal to pay it.
(Where an insurance company acknowledges responsibility, the need for such a lien is greatly diminished. They can fight about what constitutes a “reasonable and customary” charge – in court if necessary)
And many times this is were the cases end up. What is reasonable and customary for an insurance company is way under the standard charge’s most towing firms charge.An insurance company’s acknowledgment of responsibility may come several days after the non-consensual police ordered tow. storage fees continue accruing and compounding. Leaving the vehicle owner to pay what the insurer will not pay. Meaning that the car owner will be in small claims court for what the insurer felt was not a “reasonable and customary” charge.
SB-95 may help the vehicle’s insurer in not paying what is fair, reasonable and customary charge. The small businessman looses out again to big cooperate lobbyist.
Having worked in a law firm for many years I can tell you if an insurance company can get out of paying they will.. Does anyone think all of the lawsuits are being filed because the insurance company wants to pay? What incemtive does this leave the insurance company to pay the tow bill or the insurance claim? How many small towing company’s are going to file a case in small claims because the insurance company objects to their charges? The insurane company is paying its lawyers more per hour than the majority of the towing bills in question.
If this bill passes what you could see someday is roads being blocked by wrecked vehicles and the authorities can’t get a towing company to come. Don’t believe me? Call AAA and other similar providers and ask them how hard it is to get a provider to tow for them.
I’m not sure towing companies can claim the moral high ground over insurance companies. I’ve observed more than one towing company operating in a less than honorable fashion.
Doug, have you ever been involved in a lawsuit with an insurance company? If you think they are on your side you have a lot to learn in life or you work for one. Either way if you were ever injured in a collision you may find that you have a different view.
I have experience with lots of litigation where insurers were involved; both working with them and against them. I’ve also been involved in litigation with towing companies. I find that insurance companies are more likely to honor their legal responsibilities than towing companies.
Obviously, there are exceptions on both sides; but if all you tell me is that I have to place my trust in an insurer or in a towing company, and I have to make my decision based on that information alone, I’m going with the insurer.