AGENCY CORNER - Towing Charges and What’s Covered?

AGENCY CORNER

By Chris Huff

Towing, storage, and cleanup costs?

It seems that in recent years the towing and cleanup charges assessed when an accident occurs have been skyrocketing. We have seen outrageous charges across all states in the southeast where we conduct business, but it is applicable nationwide. Sometimes as much as $50,000 to $100,000 is due to many different factors, and there are other things we as insureds can do to try and mitigate the cost.

The first issue we deal with is non-consensual towing when there has been an accident on a roadway. Law enforcement officers must act quickly to get the road cleared and accessible to the public. The officers are working off a rotation list for that area and directly call one of the local towing companies to remove the accident. At that point, the trucking company has no control over which towing company will show up. However, suppose you can get to the accident in time or instruct your driver to discuss with the officer. In that case, you may be able to use a towing company you have an ongoing relationship with.

It is always good to build a relationship with a towing and recovery company to call in these situations. That relationship may save you a tremendous amount of money on towing, storage, and cleanup costs incurred. Beyond the actual towing of the units damaged from the scene, the next significant expense is the cleanup of the load, which could include fuel spillage. In the forest industry, a truck rollover can be costly due to the type of logs or chips spilled. Suppose the towing company must call in additional equipment to remove debris. In that case, there will be an additional charge, driving up the cost.

In this situation, if you can get equipment to the scene yourself to load the logs on another truck or clean up the chips, you will save a considerable amount of money. We have had a few situations where our insureds were able to contact another logger close to the scene of the wreck, and they were able to help with the cleanup.

The last issue we see that can cause a considerable expense on the towing and recovery bill is the storage cost. Some towing companies charge excessive storage fees for the unit until the towing bill is paid. We have seen charges as much as $500 a day. So, it is very important to work with your agent and carrier to try and get the vehicle out of storage as soon as possible to reduce the accumulation of storage fees.

There are certain situations where your insurance will cover towing and recovery, but there are times where it will not. First, suppose the other party is at fault. In that case, they should be responsible for your vehicle repairs and towing costs if you have physical damage on your policy. In some states, they are also required to cover cleanup costs.

On a commercial policy, the thing to remember is that your liability coverage will not cover towing if you are at fault. In this instance, you would need to have physical damage coverage (comprehensive & collision) to cover the towing. How the physical damage coverage is written can determine how much the carrier will cover. Some policies written on a stated amount limit may have a limited towing expense. And some policies written on cost new limits (ACV) may not have a towing limit. Some policies will have coverage for cleanup, and some may not. It is crucial to read your policy or consult with your agent.

Lastly, if you find yourself with an excessive towing bill after an accident, work with your insurance company and try to get it reduced. Sometimes, a towing expert can give you an estimate on fair charges in which you could act quickly to offer to pay the towing company at a reduced rate. In certain situations, it may be necessary to hire an attorney to assist you in reducing the charges to a reasonable amount. ~FMIC