Auto insurer goes after metro Detroit towing, restore retailers over payments – Detroit Free Press

August 19, 2022 By admin

An auto insurer that is new to Michigan is suing quite a few towing and collision restore retailers in metro Detroit, claiming the companies are charging extortionate costs reminiscent of greater than $2,000 for a tow and $150 or extra per day for automobile storage.
The insurance coverage firm, generally known as CURE or Residents United Reciprocal Alternate, says it has sued a few dozen space towing and collision retailers since this spring and filed its newest lawsuit this week.
Most of its lawsuits in Wayne County Circuit Courtroom are in opposition to personal companies whose towing and storage charges aren’t regulated by the Metropolis of Detroit or different municipalities — or no less than not regulated in the course of the form of alleged circumstances through which they took in a CURE buyer’s automobile after a crash.
CURE says the companies refused to launch the automobiles till CURE paid extravagant quantities for their towing and storage, in some cases greater than $5,000 for a single automobile.
CURE — and never the automobiles’ homeowners — finally paid the companies to get the automobiles launched.
In a lot of the circumstances in CURE’s lawsuits, the automobiles had been declared whole losses whereas on the collision retailers as a result of the associated fee to restore would have rivaled the automobile’s worth.
Even so, CURE nonetheless paid the collision retailers to get possession of the totaled automobiles as a result of such automobiles can fetch 1000’s of {dollars} via salvage auctioneers like Insurance coverage Auto Auctions or IAA.
CURE began in New Jersey and entered Michigan final 12 months within the wake of the no-fault insurance coverage overhaul. It markets itself as a decrease price auto insurer, particularly for historically high-cost areas reminiscent of Detroit.
It is among the few auto insurers in Michigan — presumably the one one — to not use a credit score score-like metric generally known as an “insurance coverage rating” when pricing charges for purchasers.
In a cellphone interview, CURE CEO Eric Poe mentioned that forcing insurance coverage firms to pay outrageous claims like $5,000 for a single automobile’s towing and storage finally leads to increased auto insurance coverage premiums for everybody.
“I do consider that lots of different carriers, as an alternative of combating, they’ve agreed to inflated  (towing and collision store) charges as a result of it’s simpler, after which say, ‘Effectively, I simply gained’t write enterprise in Detroit,’ ” Poe mentioned.
“So we might moderately combat and ensure issues are finished appropriately and pretty than take care of a scenario the place we have now to extend prices for all of these individuals who dwell in Detroit.”
CURE  says the companies it’s suing both towed or organized to be towed CURE clients’ automobiles from accident scenes.
As soon as the automobiles arrived at collision retailers, the companies started to cost a rising listing of charges. The charges typically included as a lot as $150 to $175 per day for automobile storage, plus quite a lot of different fees, on high of the value for the tow.
CURE says the companies would not launch the automobiles till the  payments had been paid. A number of of the per-vehicle payments which might be cited within the lawsuits embody:
Attorneys for The Collision Restore Store and Drake’s Collision referred to as CURE’s lawsuits frivolous and denied any wrongdoing.
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Employees at American Collision and The Collision Store of Warren informed the Free Press they might ahead messages in search of remark to the corporations’ homeowners or managers, who didn’t reply.
One other insurer, the AAA Auto Membership Group, final month sued Complete Package deal Towing in Detroit and a separate allegedly affiliated enterprise, Detroit High quality Collision, accusing them of charging   “outrageous” towing, storage and administrative charges totaling $5,955 to launch a automobile.
The swimsuit claims that Complete Package deal was by no means licensed to ship the automobile to the collision store.
An lawyer for Complete Package deal Towing, Gregory Rohl, mentioned the agency’s charges are customary within the business and that both the automobile’s proprietor or insurance coverage firm wants to choose up the automobile in a well timed method.
“It seems that the brand new wave of litigation in opposition to towing firms is just designed to offset their prices, which in giant half are a direct product of their delay in responding to their insured’s legal responsibility publicity to tow and attendant storage charges,” Rohl mentioned in a textual content message.
 AAA’s lawyer in the case didn’t reply to a request Friday for remark.
The charges charged by companies in the CURE lawsuits had been increased than what’s allowed by towing firms and storage tons collaborating within the Detroit Police Division’s program for “licensed” towing and impounds.
For licensed tows, corporations are typically prohibited from charging greater than $125 per tow and $15 per day for storage.
In change for accepting these set costs, final up to date 9 years in the past, the corporations are put in rotation for a regular stream of towing enterprise from accidents and crime scenes in Detroit. There are at the moment 14 licensed tow firms within the rotation.
The towing business in Detroit has been the topic of corruption scandals lately involving law enforcement officials, elected officers and towing firm homeowners.
A number of present or former officers have confronted prison fees for accepting bribes to steer work to towing firms, together with a lately retired officer who was sentenced final month to fifteen months in jail.
Former Detroit Metropolis Councilman Andre Spivey was sentenced in January to 2 years in jail for accepting practically $40,000 in change for his political affect on a automobile towing ordinance earlier than the council. He took the cash from a person within the native towing business who is also a confidential FBI supply.
Some auto accidents in CURE’s lawsuits occurred in Detroit and had been responded to by Detroit police, in line with police stories.
But these automobiles didn’t go into town’s licensed towing system with its capped charges.
An lawyer for CURE, Timothy Mizerowski of Mizerowski Thon Parker & Lefere in Novi, mentioned they hope to uncover extra concerning the circumstances of every tow and the way the automobiles obtained to the collision retailers because the instances develop.
Drivers in accidents in Detroit usually are not essentially required to just accept an licensed towing firm from the rotation that police dispatch to the scene.
As long as no prison exercise is suspected, they don’t seem to be blocking site visitors and the various tow truck arrives promptly, drivers can go along with a personal towing firm of their selection.
Underneath these situations, the value for the tow — plus subsequent storage — is not topic to the regulated charges.
Julie Semma, vp of the Detroit Towing Affiliation, which is not concerned in CURE’s lawsuits, mentioned in an interview that she considers a automobile storage price of $150 or extra to be “exorbitant.”
Semma is also the proprietor of 7-D’s Towing in Detroit, one of many licensed towing corporations.
“A $150 per day is unquestionably outrageous,” she mentioned. “However I can inform you this, Detroit licensed towers don’t cost exorbitant quantities.”
A number of collision store employees related to retailers being sued,  who declined to talk for attribution due to the pending litigation, say that CURE takes an unusually very long time to retrieve its totaled automobiles from retailers.
They famous how weeks usually handed between the time that the automobiles cited in CURE’s lawsuits arrived at collision retailers and when the totaled automobiles left — all whereas the storage price clock was working.
Collision retailers usually have restricted house and cost increased storage charges as an incentive for non-customers to get their automobiles out, the insiders mentioned.
Many retailers have a grace interval earlier than the storage charges begin, reminiscent of 48 hours. If the automobile’s proprietor will get restore work finished on the store, any accrued storage charges are sometimes waived.
“We aren’t a storage facility,” one business insider mentioned. “Think about 50 insurance coverage firms leaving their vehicles right here for a month at a time.” 
Poe, CURE’s CEO, declined to remark about why the insurance coverage firm has taken weeks in some cases to take away automobiles from collision retailers. 
The CURE lawsuits accuse companies of civil extortion, unjust enrichment, violating the Michigan Shopper Safety Act and statutory conversion, or wrongly taking management over automobiles, amongst different claims.
CURE’s largest financial declare is in opposition to Drake’s Collision in Southfield, citing it for “unfair, unconscionable and misleading commerce practices.”
The insurer says it finally paid $48,245 for Drake’s to launch 9 automobiles. All of them had been totaled.
One $5,520 invoice was for a 2013 Lincoln MKZ. The listed fees on the invoice had been $2,075 for towing from an outdoor agency, $1,050 for storage, $705 for “cleanup,” $990 for “miscellaneous,” $350 for administration, $195 for “yard” and $155 for “preservation.” 
Drake’s lawyer, Steven Haney of the Haney Regulation Group, referred to as it a frivolous lawsuit and mentioned Drake’s charges are permissible by regulation and that its $150-per-day storage price is affordable.
The underlying difficulty, he mentioned, is that it takes CURE an common of 21 days to retrieve automobiles from Drake’s.
“In the event that they know it’s a whole loss, there is no such thing as a excuse for them to easily not get a tow truck and take it off my consumer’s lot,” Haney mentioned. “What potential rationalization have they got for leaving vehicles mendacity round throughout Detroit?”
Contact JC Reindl at 313-378-5460 or [email protected]. Observe him on Twitter @jcreindl. Learn extra on enterprise and join our enterprise publication.