Tuesday, 28 February 2006 09:00

CAA warns that insurers to cap storage charges

The California Autobody Association (CAA) will be holding its own Legislative Day this year on March 29 at the Capitol in Sacramento. All body shops are invited to attend a short update session and participate in scheduled meetings with their legislators. Further information will be available at www.calautobody.com

Capping storage charges

According to CAA Executive Director David McClune, some insurers are trying to reduce claim costs by limiting the amount they will pay in vehicle storage fees to body shops at a maximum of $400. These insurers are erroneously using a section of the civil code that deals with lien sales and repossessions.

The correct statute dealing with insurance company payment of towing and storage charges is section 22524.5 of the vehicle code. It reads as follows:

"Any insurer that is responsible for coverage for ordinary and reasonable towing and storage charges under an automobile insurance policy to an insured or on behalf of an insured to a valid claimant, is liable for those charges to the person performing those services when a vehicle is towed and stored as a result of an accident or stolen recovery. The insurer may discharge the obligation by making payment to the person performing the towing and storage services or to the insured or on behalf of the insured to the claimant."

Any insured or claimant who has received payment, which includes towing and storage charges, from an insurer for a loss relating to a vehicle is liable for those charges to the person performing those services.