NICB: Towing Scams Prove Costly for Chicagoans, Insurers

September 7, 2020

Though perhaps not the absolute worst region in the U.S. for insurance scams involving towing abuses, Chicago-area vehicle owners still face exorbitant towing and storage fees, unsolicited tows, and dangerous, unsafe towing practices, according to the National Insurance Crime Bureau (NICB).

In Chicago, a typical tow should cost a vehicle owner less than $400, the NICB says. However, towing bills in the city range from $3,000 to $5,000 due to extreme towing and storage fees, according to the NICB. These fees could mean once a victim’s car is towed away, they may not be able to afford to get it back.

Public safety is also at risk. In June 2020, six people were injured in a bus accident as the bus driver swerved to avoid a collision with a tow truck seeking to be the first to an accident scene. In extreme cases, gunfire has erupted between rival towing services attempting to provide the service.

The NICB is supporting an amendment to city ordinance that would require additional licensing to improve safety. The license will allow tow operators to tow, relocate and store damaged or disabled vehicles from public areas, such as accident scenes.

In part, when renewing or applying for licenses, tow companies must provide proof of a commercial vehicle relocator license, provide a statement certifying the applicant has never been convicted of a felony, and proof of insurance coverage. Once approved, a copy of the license must be placed in plain view within the tow truck. If it is discovered a tow operator falsified or lied on the application the license will be revoked. Additionally, violating accident scene solicitation regulations will become a penalized offense.

Other jurisdictions have implemented similar measures to reduce predatory practices by towing companies, the NICB said.

The NICB identified the following U.S. metropolitan areas as the five worst for towing abuses: Los Angeles/Long Beach/Anaheim; New York/Newark/Jersey City; Chicago/Naperville/Elgin; Philadelphia/Camden/Wilmington; and Houston/The Woodlands/Sugar Land.

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Insurance Journal West September 7, 2020
September 7, 2020
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