The National Insurance Crime Bureau (NICB) says it is receiving reports of price gouging by towing companies and impound lots in the aftermath of Superstorm Sandy.
The NICB said its member companies are already receiving bills with classic signs of price exploitation. For a tow that occurred on October 30, one towing company charged $2,150, which included a $1,250 “recovery” fee in addition to charges for towing, storage and administration.
NICB members report towing firms are hooking up vehicles without the owner’s consent and telling the owners that all vehicles are being towed off the street, without any authorization from local authorities. Insurers also report that towing companies are going door-to-door soliciting business, telling people they will contact the insurance company and handle the expenses. One company even claimed that 50 percent of the charge will go to the American Red Cross.
“These charges are way out of line with reasonable fees and it’s akin to someone charging $20 to $30 for a gallon of gas just to take advantage of the situation,” said NICB CEO Joe Wehrle. “This kind of outrageous conduct is only adding to the misery and expense incurred by people who have already suffered far too much.
Law enforcement agencies throughout the area have their hands full with life-and-death situations and, in most cases, they are not yet processing cars that have been flooded or abandoned following the storm, said Wehrle.
He recommended that before allowing anyone to tow their vehicle, owners should contact their insurance company for assistance with a reliable towing and storage firm so they are not stuck with a bill far above the reasonable charges set forth in their policy. Anyone who suspects they are being overcharged should contact the local authorities or call 1-800-TEL-NICB to report it.
Wehrle noted that vehicle owners who do not have towing or storage coverage under their insurance policy may be at risk of having their cars crushed for scrap and still being on the hook for exorbitant fees long after their cars are gone.
The National Insurance Crime Bureau, a not-for-profit organization, is supported by over 1,100 property/casualty insurance companies and self-insured organizations. NICB member companies wrote over $319 billion in insurance premiums in 2010, or approximately 80 percent of the nation’s property/casualty insurance.