You just had a car accident. You’re feeling shocked and disoriented.
A seemingly helpful tow truck driver suddenly arrives on scene. A typical first reaction is relief that help has arrived – someone who knows what to do. So when suggestions start being made, it’s easy to just agree and go along.
This is exactly when the trouble often starts.
There are many first-rate, honest tow truck drivers out there, just like there are many first-rate, honest auto repair shops.
But it’s easy to fall prey to the dishonest scam artists who know how to take advantage of you when you are at your most vulnerable.
Tow truck and repair shop fraud is a big part of the $1 billion annual auto insurance fraud problem that causes honest drivers across Canada to pay higher premiums.
They are known as “chasers” – tow truck drivers who try to get to your accident scene first and are tied to, or owned by, repair shops poised to game the system.
The tow truck driver gets a referral fee from the repair shop by convincing you to have your vehicle towed there. The repair shop recovers the fee by “padding” its repair bill with inflated prices or unnecessary repairs, or both. All of these costs go into fraudulent insurance claims losses.
Often, insurers won’t deal with these repair shops. But if your vehicle is already towed there, you are stuck.
For your insurer to get access to the vehicle to assess its damage you will need to tow it to another, approved repair shop, but meanwhile you can be liable for untold hundreds of dollars in fees, storage fees and other administrative fees charged by the shop.
If you refuse to pay these fees, the shop can have a lien placed on your vehicle. In fact, the Repair and Storage Liens Act actually permits the vehicle repair shop to sell your vehicle to cover the fees if they remain unpaid.
Dealing with these fraudsters can be a nightmare.
But you can protect yourself against this type of insurance fraud, which is just one of many.
• Make sure you know your rights. You have the choice and decision-making power to refuse a tow truck from towing your car to their recommended repair shop.
• Look for a municipal license number on the tow truck itself.
• Look up the name of the tow truck company on your smartphone to see if it has a website and is affiliated with CAA or some other reputable roadside assistance organization.
There are obvious clues to watch out for. For example, it is illegal in many Canadian cities for a tow truck driver to recommend a repair shop without being asked.
Also, make sure you carefully read and understand everything the tow truck driver asks you to sign, and under no circumstance should you sign a blank form.
Make sure your vehicle is taken to a secure location where an adjuster or appraiser from your insurance company can have access to it, such as a Collision Reporting Centre or police station.
Remember, you have the option to choose where to have your vehicle towed to for repairs. Ask your broker, your insurance company, or even a trusted friend where to go.
Thank you to our friends at Aviva for providing this information.