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Letter to the Editor

Proposed $300 Towing/Storage Cap in Ontario Dropped

Sources close to Michael Colle, parliamentary assistant to Finance Minister Greg Sorbara, say that the change in insurance policies, due with new policies issued after April 14, 2004 will not happen. The Financial Services Commission of Ontario had posted the initial policy information earlier in the year.

Starting in mid-April, Ontario motorist’s insurance policies were scheduled to include a clause that would limit insurers’ cost in towing and storage (except in northern Ontario) to a maximum of $300. If the tow and storage costs were over $300, and many times there were, the motorist would be required to pay the excess in order to retrieve their vehicle. Insurers had complained that “tow truck chasers” and some gouging storage yards have been overcharging for towing services for some time and costing insurers and car owners significant extra monies.

One customer was hit with a bill of $1,754 for towing and six days of storage, while another customer's bill ran to $2,332. Some storage and tow firms charged $150.00 per day to keep a vehicle in their pound. These additional costs were being passed on to motorists through higher insurance premiums, and insurers were looking to try and cut their costs.

However a number of tow firms and collision repair associations pointed out that it is not uncommon for a legitimate tow from a licensed firm with minimum storage, particularly if the vehicle had to be take to a Collision Reporting Centre (CRC), to exceed the $300 cap limit.

Insurers’ image, already suffering with the consumer impact of higher premiums over the last year, might again be damaged by being perceived as not looking after their client’s problems with a damaged vehicle.

Tony Nigro, President of the Hamilton District Autobody Repair Association (HARA), commented, “Although we do not have large towing abuse in our local area, our members were worried that this capping would create problems for consumers as regulated tow prices were close to the proposed cap price already.”

Collision repair associations pointed out that insurers should not abandon motorists and that the way to attack exorbitant tow fees, would be through the passage of regulations in the Collision Repair Standards Act, which was passed by Queen’s Park in December 2002, and if implemented, would help to control abusive tow companies and their high priced invoices.

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