Thursday, 14 February 2019 16:22

Emergency CAA Meeting on Storage & Towing Fees Experiences Record Attendance

Written by Victoria Antonelli
The Feb. 6 CAA meeting had 210 attendees, the highest number in the chapter’s history. The Feb. 6 CAA meeting had 210 attendees, the highest number in the chapter’s history.


On Wednesday, Feb. 6, 210 industry members gathered at The Phoenix Club in Anaheim, CA, to discuss legislation passed in January concerning storage and towing fees.


Dave March, owner of Fountain Valley Body Works and longtime member of Orange County/Los Angeles California Autobody Association (CAA), said the meeting had the highest attendance in the chapter’s history.


Mathew Gibson, a top Bureau of Automotive Repair (BAR) official in the Department of Consumer Affairs, flew down from Sacramento to explain the new laws and clear up any fee confusion. The night began with a meet-and-greet at 5:30 p.m. and was followed by a tri-tip steak dinner at 6:30 p.m. Gibson was introduced by former Los Angeles CAA President Anthony Guinn at 7:30 p.m. Gibson’s slideshow presentation lasted until 8 p.m. and was followed by an hour-long Q&A session.


Gibson’s main points were:


• Insurers can’t cap storage rates.

• Insurance companies are trying to use California Highway Patrol (CHP) rates, which are half of the normal rate.

• CHP rates aren’t meant for body shops---more for towing and storage facilities.

• Body shop owners have the right to charge reasonable, competitive rates that make sense for collision repair facilities.

• Insurers cannot cap the number of days a vehicle is held in storage.


“We are pretty much in the same position we were in before the regulation passed Jan. 1,” explained March. “These laws came into play [because] the BAR got wind that some shops in San Francisco and Los Angeles were charging exorbitant amounts---around $500 a day---for storage, and no rules [were] in the books to regulate this. Now, the BAR is able to say that’s unreasonable.”


According to March, the going rate for storage for a shop in the Valley, for example, is around $100 a day, but several insurance companies have been trying to charge around $52 because that’s the CHP rate.


Gibson said the BAR has clarified that the competitive rate can continue to be charged.

Gibson stated in his presentation that on Jan.1, three changes were made to vehicle code sections that govern towing and storage fees (10652.5, 22524.5, 22651.07):


1. Insurance companies are obligated to allow consumers’ repair facility of choice.

2. Insurance companies are permitted to inspect stored vehicles at no charge.

3. Storage rates must be reasonable.


According to Gibson, a towing and storing charge is reasonable for an auto body shop “if it is comparable to storage-related rates and fees charged by other facilities in the same locale. This does not preclude a rate or fee that is higher or lower if it is otherwise reasonable.”


The following fees are considered “unreasonable,” according to the new BAR regulations:


• Administrative or filing fees, except those incurred related to documentation from the DMV and those related to the lien sale of a vehicle

• Security fees

• Dolly fees

• Load and unload fees

• Pull-out fees

• Gate fees, except when the owner or insurer of the vehicle requests that the vehicle be released outside of regular business hours


Gibson also clarified the difference between a “lien” and “lien sale” in his presentation.

A “lien” is a right to keep possession of property belonging to another person until a debt owed by that person is discharged. A “lien sale” is a sale of a consumer’s vehicle to satisfy an unpaid repair or storage debt.


According to Gibson, civil code section 3068 defines when a lien arises in an automotive repair transaction. It also describes the necessary steps when filing for authorization to conduct a lien sale.


For a facility to be authorized to conduct a lien sale, it must:


• Obtain the consumer’s authorization to perform repairs

• Complete the contracted repairs or teardown

• Provide the consumer with an invoice of the completed repairs

• File with DMV for authorization to conduct a lien sale within 30 days after the repairs are completed


The lien limits specified in 3068 (c) are:


• $1,500 for repairs (unless prior authorization is obtained from the legal owner or lessor)

• $1,025 for storage

• $1,250 for storage (at the request of any person other than the legal owner)

• $1,750 in attorney’s fees (if applicable)


This section of civil code 3068 does not apply to insurance companies in any way. The above limits are for the legal owner of the vehicle as defined by the DMV, not the registered owner or an insurance company.


Guinn concluded the meeting around 9 p.m. Questions or concerns can be sent to Gibson at mathew.gibson@dca.ca.gov or 916-403-8060.