by Sam Richie & Shannon K. Mitchell, AASP-MN Lobbyists
Over the summer and fall, two concerning and related trends have become more prevalent for AASP-MN members. Some insurance companies are pushing back against and, at times, refusing to pay storage fees. Additionally, in response to storage fees, some insurance companies are choosing to simply abandon total-loss vehicles at auto body shops.
As winter quickly approaches, vehicle storage can be even more of a burden on shops because of snow removal, so knowing your rights to charge storage fees is even more important. Ultimately, storing vehicles while waiting for approval to start or complete repairs, or for payment from either the insurance company or customer, results in a loss of space and ability to repair other vehicles.
Minnesota law explicitly recognizes auto shops’ right to charge storage fees, setting parameters of “storage and towing charges shall not exceed the usual and customary charges for the towing and storage of undamaged vehicles in the area, except if the vehicle, due to its damaged condition, requires special handling in the towing or storage, an added charge may be made.” (MN Statute 72b.092) Having to store a torn-down vehicle awaiting claim or supplement approval is just one example of special handling.
Storage fees are required to be posted per Minnesota Statute 325F.62 Required Shop Practices. AASP-MN also provides members with a template rate notification form that can be shared with customers and insurance companies. In the case of vehicles that are financed or leased, storage charges for greater than 15 days are only allowed to be included in a lien against a vehicle if the creditors are notified by certified mail, per Minnesota Statute 514.19. While creditor notification isn’t required for charging storage at start, it is helpful when it comes to getting paid.
To calculate your fee, researching the posted rates of other shops, general parking options, and tow lots in your area can be helpful. LaborRateHero.com is also a good resource for this type of comparison. Additionally, consider your specific circumstances, such as renting an extra lot to store vehicles or the cost to the shop if a bay or lift is occupied by a disassembled vehicle awaiting claim or supplement approval.
Following these best practices for charging storage fees will help auto repair shop owners collect the fees they are entitled to under law. If the insurer or customer refuses to pay, these practices will also help make for a stronger path toward recourse.
Another recent and related trend is insurers abandoning vehicles at repair shops in lieu of payment. Over the past few months in cases of total loss vehicles, where there are charges for towing, storage and sometimes teardown, a number of insurance companies are abandoning the vehicles. This is not only unethical but prohibited by Minnesota Statute 168B.03, which states “any person who abandons a motor vehicle on any public or private property, without the consent of the person in control of such property, is guilty of a misdemeanor.” Other segments of 168B cover the steps for selling an abandoned vehicle.
While these insurers often leave the title, this is still abandonment if the repair shop owner has not consented to this arrangement. As this is a recent trend, AASP-MN is working diligently to capture the specifics of each case to highlight this unethical and illegal business practice trend for the Department of Commerce. We ask that you please contact the Executive Director Linden Wicklund, Linden@aaspmn.org, (612) 623-1110, if you have experienced this.
We will track these issues during the upcoming legislative session, which will begin in February 2024. Meanwhile, AASP-MN is refining its legislative priorities of what it will proactively advocate for. Look for our full legislative preview guide in next month’s article.
Want more? Check out the December 2023 issue of AASP-MN News!