A towing reform bill that sparked an unexpected debate between collision repairers and insurers in Pennsylvania has passed the Pennsylvania House of Representatives.
The Towing Standards Act (H 2041) passed, 139 to 52, after a spirited discussion March 17 on the floor of the legislature.
A number of states recently have passed predatory towing bills to prevent "wreck chasing," often with the support of both insurers and auto repair shops. The Pennsylvania bill, however, sparked a protest from the Pennsylvania Collision Trade Guild (PCTG), which claimed the bill would allow insurance companies to move cars to DRP facilities without the owner's consent, and possibly required towers to make otherwise illegal searches of vehicles for owner and insurance information.
"This bill started out with good intentions, but we believe that the insurance industry stepped in and put their own ideas into it," says Stephen Behrndt, director of the PCTG. "Now you basically have an insurance bill."
Behrndt said PCTG will continue to oppose the bill as it moves through the Senate, although he noted that the towing discussion had illuminated the insurer steering problem in the state.
"The one thing that came out through discussions of the bill was the intense steering that even the [insurance committee] chairman admitted to," Behrndt says. "We now have legislators in Pennsylvania recognizing the steering issue through the insurance industry's efforts to introduce a bill that would create even more steering."
The bill primarily targets a number of predatory tactics utilized by so-called "wreck chasers," by requiring towers to provide information on fees and storage locations, and prohibits them from towing vehicles at the scene of an accident or in the disabled vehicle unless specifically summoned there by the owner or the police.
"This is a common sense proposal pertaining to the towing industry," says Rep. Anthony DeLuca (D-Allegheny County), the original sponsor of the bill in the House and chairman of the Insurance Committee.
That last provision, opponents said, would prevent a tow truck driver who spots a vehicle in distress from stopping to offer help unless they had been specifically called to the scene.
Of more relevance to repair shops are provisions that would prohibit tow truck operators from securing "the signature of the owner or operator of the motor vehicle on a document that includes authorization to repair the vehicle or to authorize storage of the vehicle for more than 24 hours."
The somewhat vague wording could prevent repair shops that also operate tow trucks from getting owners to sign repair contracts.
"What they were trying to do was legislate against the wreck chasers," Behrndt says. "Those companies will have you sign these waivers where you lose all rights to your car, and the carrier has to pay exorbitant fees. We need to do something about that. But you're creating legislation for 30 percent of the cars towed in our state that is going to affect 100 percent of the cars towed here."
The bill also would specifically require towers to release vehicles upon request of the owner or, with the owner's consent, an insurer or another tower acting on their behalf, and would require towers to accept checks and credit cards as payment. The original language in the bill did not specify obtaining the owner's consent.
Another section, under the original wording, would have required towers to notify owners and insurers of the vehicle's location after it was towed. The PCTG claimed that the original version of the bill would have required the tower to search the vehicle for owner information (like a title) in order to comply. The bill has since been reworded so that towers are only obligated to notify owners if that information is readily available.
Requiring them to notify insurers, however, raised even more objections from repairers, towers and legislators who opposed the bill, who pointed out that it would undermine vehicle owners who had chosen not to report an accident to their insurance company.
"This turns the towing industry over to the insurance industry," said Rep. Stephen Barrar (R-Chester and Delaware County). "It's very unfair what we're doing to them today, without taking their considerations in to mind."
"I think what has happened was that this bill was drafted with good intentions, but the drafting excluded those people who know the towing business," says Rep. Curt Schroder (R-Chester County). "It excluded those who could have prevented these kinds of problems with this bill."
The Pennsylvania Towing Association, which had initially sponsored the bill, withdrew its support after several changes were made, and issued a letter to the legislature listing their objections. In particular, the PTA opposes provisions that would require towers to accept checks from insurance companies or credit cards from consumers because it would give the payers the opportunity to stop payment in the event of a disagreement or the initiation of a "spurious complaint."
They also objected to the notification requirements. "While the vehicle code grants the right to his information for vehicles towed by police order, as a matter of practice, the information often cannot be obtained for many days from police agencies," the PTA letter said.
The insurance industry in Pennsylvania has taken the position that the concerns expressed by towers and repairers are unfounded. In a letter to the legislature, Samuel Marshall, president, and Jonathan Greer, vice president, of the Insurance Federation of Pennsylvania (IFP), noted "If the problems they've raised were actually in the bill, we'd understand their concerns."
From the insurance companies' perspective, the bill is a "consumer friendly" piece of legislation that simply requires towers to let consumers know where the car is being towed and what their fees are, to release the car to the owner upon payment, to accept credit cards from consumers, and to allow reasonable access to the vehicle.
"We believe the objections you've been hearing aren't so much overstated as unfounded – because they aren't in the bill," the IFP letter says.
Behrndt, however, points out that the definition of towing listed in the bill provides for vehicles to be removed from a property "whether the owner or vehicle operator consents." The PCTG has taken this to mean that an insurance company could tow a vehicle from a storage facility without the owner's consent.
Rep. Barrar was more blunt in his assessment. "When the Insurance Federation comes to this chamber and supports a consumer friendly bill it will be a very cold day in this chamber, and somewhere else," he says.
The Pennsylvania senate will now consider a corresponding bill (S-1143) before a final law can be passed.
