Posted : 08/04/2011
After a minor traffic accident in Chicago, a towing company charged a woman $914 to tow her vehicle, added a $100-per-day fee for storage, then basically held her car hostage, refusing to release it until she appeared in person with cash.
Tales like these put Chicago at the top of the five worst cities list for towing hassles, based on a recent survey by the Property Casualty Insurers Association of America (PCI). No. 2 on the worst list is Philadelphia, followed by New York, Atlanta and Houston.
The five worst states: Illinois, Pennsylvania, New York, New Jersey and California.
Towing nightmares are nothing new, but with a growing number of reports of inflated towing claims, auto insurance companies are focusing attention on the issue, says Robert Passmore, PCI's senior director personal lines.
Last year, insurers referred 624 suspicious towing and storage claims to the National Insurance Crime Bureau for investigation, more than double the number in 2009. Outrageous towing and storage bills increase out-of-pocket expenses for consumers and costs for insurers, which ultimately leads to higher car insurance rates.
In response to members' concerns, PCI commissioned a survey of claims professionals nationwide about which locations were worst for overly aggressive towing practices. Forty-two states and 149 cities were named.
The trade group also asked about common complaints. Among them:
Passmore is quick to note that most towing and storage facility operators are honest. "It's a limited number of bad actors who cause the majority of the problems," he says.
Ed Forsythe, president of the Professional Towing and Recovery Association of Illinois, says the problem in Chicago stems from a lack of police presence and enforcement, which allows a relatively small number of operators to chase after wrecks and steal business from the good guys.
"We don't even call them tow operators," he says. "We call them crooks with tow trucks. Some of the bad guys are charging $900 to $1,200 for a tow that's not even three miles, a $200 fee to clean up the street, $200 to winch up, and $75 an hour for using the truck."
Forsythe, who's been in the industry 30 years, works for a tow operator in suburban Chicago, where, he says, problems are limited compared to inside the city limits. If Chicago were taken out of the equation, he says, Illinois would rank among the bottom half of states for aggressive towing practices.
The Windy City isn't alone. Last year, Philadelphia was the battleground of the so-called "towing wars" when one operator shot a competitor at an accident scene. The unfriendly competition in the City of Brotherly Love spawned a reality TV series, "Wreck Chasers," which debuted in November on the Discovery Channel.
Legislating change is difficult, Passmore says. A federal law limits the ability of states and cities to regulate consensual tows, except where safety is concerned. And local towing companies make up a strong lobbying group, he adds.
Still, lawmakers have responded.
The Philadelphia City Council passed legislation this year that requires wrecked vehicles in car accidents to be towed to Philadelphia Parking Authority lots, unless the drivers of the cars want them taken elsewhere.
Under a law enacted last year in California, towing companies must provide itemized invoices to car owners or their car insurance companies before receiving payment, and they must post a copy of the towing fees and access notice.
Forsythe says his group has worked with legislators in Illinois to write legislation, including one making wreck chasing illegal and a measure that prohibits tow operators from misrepresenting affiliations with insurance companies, auto clubs, government or any other entity to get business. But the towing association is fighting an Illinois towing law promoted by insurance companies on the grounds that it's preempted by federal law.
The U.S. District Court for the Northern District of Illinois ordered the state to temporarily stop enforcing some of the provisions until a final ruling. Those included requiring towing companies to get authorization from the car owner before towing and to issue an itemized final invoice and keep copies of invoices for five years. Tow operators still have to issue a notice of disclosure before towing a car.
Forsythe says sometimes it's impossible to get the driver's authorization, such as when a vehicle is abandoned.
To reduce wreck chasing, Forsythe says his association plans to propose dispatching accident calls by computer instead of over the police radio.
Meanwhile, automobile insurance providers warn consumers to be careful. The National Insurance Crime Bureau sponsored a "know before you tow" advertising campaign late last year in Houston and will consider expanding it if funding becomes available.
"The problems are not unique to any one area," bureau spokesman Frank Scafidi says. "They happen all over."
"Don't agree to or sign anything before you check with your insurance company first," he says.
Additional tips for steering clear of a towing nightmare include:
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