Bill would prohibit caps on wrecker-service fees at accidents
Published 12:00 am Tuesday, December 1, 2009
The General Assembly is considering a bill that would prohibit the N.C. Highway Patrol from capping the amount wrecker services can charge after accidents.
House Bill 1208 is backed largely by the N.C. Towing and Recovery Association. It is the culmination of efforts by the lobbyist group to block a previous bill that would have mandated a limit to the fees charged for clearing wrecks after highway crashes.
The new bill would also establish an advisory board to deal with complaints regarding any over-charging.
When crashes occur on highways, responding officers are responsible for assessing the damage and calling a tow truck to clear the scene. To keep things fair, the Highway Patrol cycles through a list of companies.
What people involved in accidents may not understand is that they are eventually billed for the cost of the towing, as well as any fees associated with the storage of their vehicle.
Thanks to current regulations, these costs can appear to be more than $800.
That’s because wrecker services that want to be part of the rotation must submit a bid to the Highway Patrol. The amount of the bid is meant to indicate the maximum price a company could foresee charging to cover expenses in all scenarios.
This means everything from a small fender-bender cleanup to a five-car pile-up with fatalities has to be considered when calculating the bid.
Service providers have to note this maximum bid on the back of their business cards when they inform crash victims of the cost. This can cause problems, especially when the actual cost of towing, cleanup and storage is lower than the maximum bid price.
Sybil Richards, whose husband, Laddie, owns Richards Wrecker Service, said it’s never easy to hand over a bill or invoice.
“If you hand someone (in the hospital) a price thing that says $800, my goodness, they’re gonna go off the side of the road,” she said.
The price is typically much lower, she said. Most wrecks average around $200 for towing and brief storage.
People involved in a crash are allowed to request a preferred wrecker service. Since people have the right to select a company, they leave themselves open to higher rates when they allow the Highway Patrol to use the next company on the list, towing service operators say.
Sybil Richards said she believes insurance companies were behind the original initiative to set price maximums on wrecker services, since they would benefit by having to pay out less after accidents. But she said the majority of companies in the area returned far higher bids than expected and caused the initiative to backfire.
The Highway Patrol originally offered a bill to the state legislature that would have set a cap on allowable fees. Wrecker company owners argued that would ultimately destroy their profitability and fought back with a lawsuit that is still pending. They all cited steeply rising costs as a big part of their reasoning.
“I understand some people have been gouged,” Laddie Richards said. “I don’t go out and try to cheat anyone.”
Richards said when he got into the business, he could purchase a new wrecker for about $36,000. Today, he would be hard pressed to find a used truck for less than $60,000. He still keeps an old Mack wrecker in his fleet that has over a million miles on it.
He and his wife also said insurance costs for their business are exorbitant. Wreckers have to have insurance for their drivers and trucks, coverage for stored vehicles and insurance covering vehicles hooked to wreckers while in transit.
This can cost hundreds or thousands of dollars each month, depending on the size of the business.
Operations can also be expensive, and costs vary from job to job.
“If there is a fatality involved, you may be out there four or five hours,” Sybil Richards said. “You cannot pay a driver and pay to run a vehicle for six hours for $250.”
Laddie and Sybil Richards say they are as close to experts as anybody can be in their industry and therefore have a handle on what their expenses are.
“We’ve been doing this 33 years,” Sybil Richards said. “If we didn’t know what we were doing, we’d have left the wrecker business.”
And they aren’t the only ones concerned with the situation. Wreckers around the state are grappling with fuel and capital costs while fending off legislation they argue could potentially destroy their livelihoods.
William Kluttz, of Kluttz Garage and Wrecker Service, was brief but clear on the subject.
“They need to get the junk straightened out and over with,” he said.
State Rep. Nelson Cole, D-Rockingham, is the primary sponsor of the bill to prohibit capping fees, which is currently in the House Committee on Transportation.