Car Insurance

7 tips to avoid towing company fraud

Before your car breaks down, be aware of the most common tow truck scams used on the road by amateurs. Learn how to avoid an expensive, frustrating situation.

Sometimes after a serious accident that renders your vehicle immobile, you’ll have to hire a tow truck to move it from the scene and store it in a lot until the damages can be examined by your insurance company. And while this seems simply enough, there are many tricks you must be aware of to avoid being scammed by a bandit tow company. Towing and storage fees can be expensive enough with an honest company, but it can cost a fortune when you car is being held hostage by a fraudulent business.

The Property Casualty Insurers Association of America (PCI) reports that the average cost of towing and storage for a wrecked vehicle should be around $150. While this figure seems reasonable the PCI has revealed that bogus towing and storage companies kick this average to about $412 per vehicle. This illegal practice costs consumers and auto insurance companies $570 million a year. For example, a woman in Chicago was charged $900 to have her vehicle towed and then $100 a day in storage after a minor accident. When she attempted to get her car out of storage, the company wouldn’t surrender her vehicle until they received a cash payment from her. While the majority or towing and storage companies run honest businesses, the insurance industry advises car owners to be cautious of those they haven’t done business with before in order to avoid being scammed.

How can these fraudulent towing and storage companies stay in business?

Local and state governments have been federally blocked from setting a standard fee for consensual towing and storage. Consensual tows consist of vehicles taken from accidents while non-consensual tows are regulated and consist of vehicles taken for parking illegally, etc. Without set regulations statewide, fraudulent businesses have a lot of wiggle room to increase prices. And you’d be wrong to think the at-fault insurance will cover this expense for you. While the provider will cover the cost of repairs for your car, they can flat out refuse to pay the storage cost. They’ll argue that you should’ve gotten the car out of storage within a reasonable amount of time. However, getting your vehicle out of a fraudulent storage facility can be impossible.

How long can an impound lot hold onto your car?

On average it can take anywhere from ten to fourteen business days to receive a police report detailing a car accident. This process can take even longer depending on how quickly the at-fault driver’s’ insurance company cooperates and you’re reimbursed. The report and thus payment can take even longer if there’s a disagreement between the drivers involved as to who is truly at fault. During these delays, your wrecked vehicle has been towed and is sitting in a storage lot charging up a tab.

How to avoid costly tow truck and storage fees:

  • Avoid unsolicited service When you get into an accident, never accept services from a tow truck that just happens to appear at a convenient time. It may seem like a miracle, but if you or the police didn’t call them to the scene, they’re most likely a scam. This is especially true if the tow truck has no signage or they ask for information about the vehicle’s lienholder, your insurance, or other personal information.
  • Call your insurance company In most cities, the police will call a tow company to the scene of the accident if your vehicle can’t be driven. If not, you should contact your insurance agent right after an accident and have them recommend or call a towing company for you.
  • Ask for an adjuster When you’re on the phone with your insurance agent, be sure to ask that a claim adjuster looks at your vehicle as soon as possible. They’ll take a look at your car in storage and then be able to move to a repair shop. The more quickly an adjuster reviews the damage, the sooner your car can leave the storage lot and you won’t be slammed with a large bill.
  • Collect the info When the tow truck that your insurer or the police called has arrived, make sure to collect important paperwork for your records. You should ask for a printed invoice that includes the fees for towing, storage (if applicable), and any other miscellaneous charges. Double check that the signage on the tow truck matches the paperwork. You should also get some kind of documentation to confirm where your vehicle will be stored once towed (again if applicable).
  • Stand your Ground If a tow truck arrives unsolicited and refuses to leave, feel free to call the police to report fraud. It’s better to be safe than sorry.
  • Become a Member of Roadside Assistance Club If you aren’t already a member of a roadside assistance club, like AAA, considering joining one to take all the work out of getting a tow truck. You’ll have easy access to a towing company you know you can trust. It’d be a smart move to join one before a big road trip in an unfamiliar area.
  • Collision Coverage Adding collision coverage to your insurance policy will cover the costs of your own repairs, towing, and storage regardless of who was found at fault in the accident. You should consider getting a higher amount of collision coverage if you drive an expensive or new vehicle that would be expensive to repair or replace. If you don’t have collision coverage, you should try to get your vehicle out of storage as soon as possible while you’re working with your insurance company and the other driver’s company. This process can take a while and you don’t want to be charged indefinitely until it’s resolved.

Your insurance carrier is your best defense against bandit towing companies, so make sure you have a provider you can trust and afford. Get quotes and read reviews for auto insurance companies from an online comparison site, like Insurify allows you to customize, build, and purchase a policy online in minutes so you can be prepared for whatever you encounter on the road.