Advice for Avoiding Tow Truck and Storage Scams

Scams relating to car accident insurance can take many forms, but they all have something in common – they eventually cost everyone!

The inurance policyholders end up paying for increased payments associated with their legitimate insurance claim.

By being an informed member of the community, you can help minimise these scams – and lower car insurance premiums for all involved.

How Does the Tow Truck and Storage Scam Work?

A cowboy tow truck driver may be paid a referral fee by a local car repair or body shop to have vehicles involved in an accident towed there. These tow truck drivers are known in the towing industry as “chasers.”

To recover paid out referral fees, car repair shops often “pad” their repair bills. In the end, you and other insurance policyholders end up paying.

Many tow truck “chasers” are owned or controlled by the car repair shops themselves.

Insurance companies sometimes do or not do business with these car repair shops. If your car is towed to a auto repair shop that your insurance company does not deal with, and then you need to have it towed to a different car repairer, you are still required to pay the original towing service, storage and possibly other (sometimes exorbitant) administrative fees.

These fees can quickly add up to hundreds or even thousands of dollars, and your insurance often may not cover these fees.

If you or your insurance company refuse to pay the fees, the car repair shop has the right to sell your car to cover the fees.

What Can You Do?

Be informed and aware. If you need the services of a tow truck driver, understand your rights. Here are some tips:

  • Make sure the tow truck driver has a licence number on its side before you use their towing services.
  • Look to see if the tow truck is associated with a reputable company such as an industry association.
  • Listen for obvious clues. Does the driver recommend a particular car repair shop without being asked? If he/she does, this might be an indication that a referral fee arrangement exists.
  • Double check and carefully read everything the towing truck company asks you to sign.
  • Ask that your car be taken to a secure location where an insurance adjuster can have access to it.

You have the choice of where to have your car towed to for repairs.

Some car accident insurance companies use preferred car repair shops where they have an agreement that guarantees your vehicle will be repaired to the highest possible standards.

For more information, contact your insurance company.