Clearing the Air: The Truth About Storage Fees and the Puopolo Decision

by Sean Preston, Coverall Law

A Massachusetts insurance company has been spreading misleading information about what they have to pay for storage fees at body shops.

They claim that the law lets them ignore the posted daily rates at independent shops and only pay $35 per day. This claim is based on the court case Puopolo v. Commerce Insurance Company, but the way they describe the case leaves out important facts.

In the Puopolo case, the insurer paid the full storage fees to release totaled vehicles but then deducted money from their customers’ settlements to cover what they considered “too high” fees. The customers argued that this was unfair and went against their insurance contracts. The court sided with the insurer, but only because the customers didn’t bring strong evidence to prove that the shop’s higher storage fees were reasonable.

The real question is whether insurers must pay the daily rate posted by a shop or if they can choose their own rate – usually $35 per day – and deduct the rest from the payout. 

This article (see bit.ly/AgencyChecklistnewruling) makes it seem like the law fully supports insurers, but that’s not true. The court didn’t say that body shops’ posted rates are automatically unreasonable or that insurers can always pay less. Instead, the case showed that having solid proof matters in these disputes.

Independent body shops and their customers deserve the truth. This decision doesn’t stop shops from charging fair market rates for storage. Instead of taking money from their customers’ settlements, insurers should focus on speeding up the claims process and getting vehicles moved quickly to keep storage fees low. That’s a solution that helps everyone.

The aforementioned article about the Puopolo case makes several claims that favor insurers and downplay the challenges that shops and policyholders face. He presents the court’s decision as though insurers are free to pay $35 per day for storage fees no matter what the shop’s posted rate is. But that doesn’t tell the full story and could mislead shops and customers into thinking they have no choice but to accept the insurer’s rate.

The article suggests that the Puopolo ruling gave insurers the right to ignore higher storage rates and stick to $35 per day, as if it’s a universal rule. But the court didn’t make a blanket decision about storage fees. The ruling was based on the fact that the plaintiffs didn’t provide evidence to support the shop’s higher rates. The court didn’t say $35 was the legal limit for all cases – it’s a figure pulled from non-consensual towing regulations that don’t apply to agreements between body shops and customers.

The article also implies that independent shops overcharge customers because their rates are higher than preferred shops. But preferred shops can afford to charge less because they get steady business from insurers. Independent shops, which don’t rely on insurer referrals, need fair rates to cover their real costs, like rent, staff and insurance, while still giving customers a choice in where to bring their vehicle.

Finally, the article frames insurer deductions as simply “recovering” overpayments to shops with high fees. This makes it seem like insurers are being reasonable. But when insurers deduct storage fees from a customer’s payout, they’re really taking money out of their policyholder’s pocket. The customer ends up paying the price, even though they had no control over how long their vehicle stayed at the shop or how quickly the insurer handled the claim.

The article leaves out key details and presents only the insurer’s side. The court didn’t say $35 is the only fair rate, and independent shops aren’t “overcharging” when they post rates that match their real costs. Insurers should focus on making the claims process smoother instead of shifting costs to policyholders or steering them toward preferred shops.

Insurers refusing to pay posted storage rates and sticking to a $35-per-day cap may seem fair at first glance, but it causes serious problems for consumers and independent shops. When insurers deduct storage fees from an actual cash value (ACV) payout, it leaves policyholders with less money to replace their totaled vehicles. Many customers don’t know that choosing an independent shop could lead to these cuts, which creates confusion and financial stress.

Massachusetts law protects a consumer’s right to choose their repair shop, but insurers’ deductions feel like a punishment for making that choice. This kind of “pick our shop or pay the price” approach pressures customers into using preferred shops, limiting their options.

For independent shops, this practice tilts the playing field in favor of preferred shops, which can offer lower rates because they get steady business from insurers. Independent shops, meanwhile, have to charge fair market rates to stay in business. When insurers refuse to pay those rates, shops either have to absorb the loss or face delays while trying to fight for what they’re owed. This can cause serious cash flow problems that make it hard to cover expenses like rent and payroll.

Insurers’ cost-cutting tactics shift the financial burden onto their customers and the independent shops that serve them. Instead of helping their policyholders during tough times, they’re making things harder for them.

The real issue isn’t storage fees – it’s delays in the claims process. Most high storage fees build up because insurers take too long to declare vehicles total losses or arrange for them to be moved. The longer it takes, the more storage fees pile up. If insurers acted faster, they could avoid these fees without taking money from their customers.

Insurers have several tools they can use to move vehicles sooner without making shops give up their right to payment. By law, shops have a lien on vehicles until they’re paid, but insurers can work around that by posting a bond, paying the fee under protest or getting a title transfer. These options protect shops while letting insurers remove vehicles quickly.

These steps help everyone: shops get paid, customers receive faster settlements and insurers avoid long-term storage fees without punishing their policyholders. Clear communication with shops and customers about the claims process can also prevent disputes and reduce the time a vehicle sits in storage because of miscommunication or delays.

Instead of blaming shops, insurers should focus on handling claims faster and working with shops to avoid costly delays.

The Puopolo decision doesn’t create a rule that caps storage fees at $35 per day. The ruling was unpublished, meaning it’s not binding in future cases, and it only applied to the facts presented – specifically, that the plaintiffs didn’t bring enough evidence to show that their shop’s rates were reasonable.

The $35 rate that insurers rely on comes from regulations for non-consensual towing, where the vehicle owner hasn’t agreed to or been notified of the fees. Independent shops, by contrast, must post their rates clearly. When a customer chooses a shop, they agree to those rates upfront. Insurers can’t apply a non-consensual rate to a shop that follows the law and discloses its fees.

Independent shops should feel hopeful. The court’s decision was based on weak evidence, not a blanket endorsement of insurer practices. Shops that keep good records, post their rates and explain them clearly can charge fair market rates that reflect their true costs.

By staying transparent, standing up for their rights and joining forces through trade groups, shops can push back against unfair insurer practices. Insurers should stop cutting payouts and focus on doing their part to keep fees down by acting quickly and fairly. Shops and their customers deserve nothing less.

Want more? Check out the February 2025 issue of New England Automotive Report!