Some of the biggest auto insurers in Nevada urged state regulators Wednesday to take action against towing companies that they said are inflating bills for towing cars involved in accidents.
Law enforcement officers typically specify which tow truck company will remove damaged cars from the scene of an accident, because of the need to clear the street quickly, said Robert Compan, government affairs representative with Farmers Insurance Group.
These are called "nonconsent" tows, because the motorist isn't allowed to select the tow company.
During a meeting at the Nevada Transportation Authority's offices at 2290 S. Jones Blvd. in Las Vegas, Compan complained about companies that he said were overcharging for accident-scene towing services at the expense of insurance companies and consumers.
"It sounds to me that there could be numerous violations of a regulatory structure that is already in place," authority Chairman Andrew MacKay told a crowd of 75 people that overflowed into the hallway.
AAA Nevada said a random survey of 100 tows showed the average nonconsent tow cost $590, of which 59 percent stemmed from miscellaneous charges.
A claims director from American National complained about towing bills that failed to itemize the charges.
"That's a no-no," MacKay said.
Steve Poloain of Farmers outlined a study that contrasted the practices of two tow companies, one that paid drivers hourly rates and one that paid commissions based on fees charged.
Poloain questioned whether one of the towing services wasn't "double billing."
Farmers reviewed towing charges involving 214 vehicles at Company A and 178 vehicles at Company B. Neither company was identified by name.
Company A charged for out-of-the-ordinary services in 66 percent of its calls while Company B only did so 6 percent of the time.
Company A charged customers for winching services in 33 percent of the calls compared with 1.6 percent for Company B. Company A charged extra for spending longer than 30 minutes to clean accident scenes in 49.5 percent of the cases, compared with 20.8 percent for Company B.
The first time an insurance representative or motorist visits his vehicle at an impound lot is free. But Poloain complained about charges ranging from $21 to $65 for additional visits and suggested regulators require companies to keep logs to document these charges.
"At what point does this become bill padding to take advantage of the insurance company and the individual?" Poloain asked.
MacKay suggested Farmers provide information to the authority's enforcement staff.
The chairman also called on Joe Citta of State Farm Insurance to do the same for another study, but Citta said the only problem was its documents were about 18 inches high.
Compan said the Nevada Highway Patrol has designated 50 towing companies that are authorized to tow wrecked vehicles from accident scenes.
However, the Metropolitan Police Department relies on two companies, Quality Towing and Ewing Bros. Auto Towing & Towing, Compan said.
He estimated that the two companies each tow vehicles from 46,000 accidents yearly through contracts with the police.
The Farmers Insurance representative suggested that the police needed to allow more competition for nonconsent tows to drive down prices.
"I know there are some abuses," said state Sen. Michael Schneider, D-Las Vegas, who attended the meeting.
Schneider and Assemblyman Mark Manendo, D-Las Vegas, mentioned instances of tow services towing cars parked on streets within homeowner association communities within minutes of the homeowners going inside.
Contact reporter John G. Edwards at firstname.lastname@example.org or 702-383-0420.
Thursday, November 19, 2009
NV Insurers Say Towing Companies Inflating Fees
Here's the story from The Las Vegas Review-Journal:
Posted by Cyndi Kight, Associate Editor of Towing & Recovery Footnotes at 12:18 PM