Monday, September 15, 2014

Protect yourself from inflated, dishonest tows

Concerns about excessive tow bills have long been an issue for truck drivers. A question commonly asked by professional drivers is how to avoid inflated and dishonest bills. OOIDA State Legislative Director Mike Matousek is working with state trucking associations in an effort to create fairer terms for truckers around the country. In the meantime, he has provided some suggestions from OOIDA staff and members on how truckers can prepare for the likelihood of facing excessive tow bills. Here’s what Mike has to say about it.

Would your trucking business survive an encounter with a greedy towing company? OOIDA urges you to take this question seriously.

OOIDA previously reported on the epidemic of bad actor towing companies charging sky-high rates and putting truckers out of business. When truckers are involved in an accident, it is likely that state or local law enforcement will dispatch a towing company to assist with the towing and recovery effort, referred to as a non-consensual tow. Generally, law enforcement provides this service using a “rotation list,” which consists of towing and recovery companies that meet certain standards determined by each state. These lists are usually developed and administered by law enforcement or another government authority.

While these rotation lists allow for the safe and efficient removal of vehicles from a roadway, they also remove a great deal of consumer choice. For the most part, truckers have little, if any ability to choose a towing and recovery company or to negotiate prices or terms for the towing service. Unfortunately, we see towing companies that take advantage of this situation. For example, even if your tractor and/or trailer are legally safe to continue operating, some towing companies will haul your equipment away and hold it hostage until they are paid in full. The result can be financially and emotionally devastating to truckers who are already dealing with the stress of an accident or breakdown. Further, there is often little or no meaningful recourse.

Case in point, an OOIDA member recently received a towing invoice in the amount of $154,124.50 from a towing company in the state of New York. The accident did not involve other vehicles, no hazardous materials or major clean-up was required, and the recovery was not complex. Further, the majority of commercial truck insurance policies will not cover such an exorbitant cost. In our opinion, this was a quintessential example of price-gouging that probably borders on extortion and theft. Although OOIDA has filed a formal complaint with the New York Attorney General on behalf of the member in this particular case, the disposition is uncertain at best and likely months away.

So what can you do to proactively prepare for the possibility of facing an inflated and dishonest towing bill? Here are some suggestions from OOIDA staff and members:

·         Understand exactly what your insurance policy covers for your truck, trailer, and cargo. Policy limits and coverage can vary, and you might not be as “protected” as you think. If you are unfamiliar with your coverage, OOIDA encourages you to contact your insurance company or your carrier to get more details about your plan and learn about other coverage options that might suit your business better. For example, OOIDA offers a supplemental towing and cleanup policy, and other insurance companies might offer similar coverage.

·         Take pictures. If you are involved in an accident, regardless of fault, take as many detailed pictures of the scene as possible. This includes pictures of the tractor, trailer, and cargo, as well as pictures of towing company equipment and personnel at the scene. Documenting the towing and recovery process can help your insurance company settle or refute a claim. Pictures can also be used as evidence to protect you in the event of potential legal proceedings associated with a tow and recovery.

·         Consider seeking expert advice on potential business structures that can better protect your business and personal assets. No matter how unreasonable a towing bill might seem, you can be certain that many towing companies will seek to recover the balance in court. Various business structures, such as an LLC or S Corporation, can provide additional protections but they can also come with additional responsibilities and requirements. It is up to you to determine whether there is an option that works best for you and your business.

The above information is not a comprehensive list, but rather a few steps that you can take to better protect your well-being. Bad actor towing companies are a small percentage of the overall industry, but they are growing and the problem is getting much worse. OOIDA will continue to address this issue on many levels, but it is important that you do everything feasible to protect yourself from becoming a victim of this occurrence.