Tow referral fee rules ‘hard to monitor and enforce,’ insurer warns

Auto insurance providers should remind motorists that in the event of an accident, it is usually the driver – not the tow truck operator – who decides where the car gets towed.

Motorists often don’t know what rights they have if they are involved in a collision, Teresa Di Felice, assistant vice president of government and community relations for auto insurer CAA South Central Ontario, said in an interview Wednesday.

CAA SCO announced Wednesday its Towing Bill of Rights, which contains several bullet points that consumers can store in their glove compartments. One of those reminders is that motorists have the right to decide who can tow their vehicle – and what location to tow it to – unless otherwise directed by police.

Ontario law requires tow truck operators to tell motorists whether or not they are getting a “financial incentive” to tow a vehicle to any particular vehicle storage facility or repair shop. There is no prohibition right now on such a fee.

Aviva Canada said earlier this year it is calling on the Ontario government to ban referral fees – including but not limited to collision repair centres paying tow truck operators.

Di Felice told Canadian Underwriter Wednesday she has heard stories of “four or five tow trucks appearing on the scene vying for the business of taking up a particular vehicle. “It could be that that tow truck driver is associated with a particular body shop,” she said. “We still feel there is probably not a lot of disclosure” on the part of tow truck operators of their referral arrangements.

A ban on such a referral “merits discussion,” Elliott Silverstein, manager of government relations at CAA SCO, told Canadian Underwriter earlier. But CAA SCO does not go so far as to say there should actually be a ban on such referrals.

“It is hard to monitor and enforce the disclosure of tow truck drivers telling the driver [of the vehicle] they are picking up that they have a relationship with a body shop; that they are taking you to a particular repair facility,” Di Felice said Wednesday. In some cases, she added, “your insurance company wants you to go to [a body shop other than the one recommended by the tow truck operator] and that’s because your insurance company has probably vetted out who best to do business with in terms of getting the repairs done.”

CSN, which has more than 335 collision repair centres in Canada, does not give referral fees to tow truck drivers, the firm’s chief operating officer, Flavio Battilana, told Canadian Underwriter earlier. “It’s wrong.”