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California BAR: Legislative change is needed to regulate storage fee disputes

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Business Practices | Legal
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California’s Bureau of Automotive Repair (BAR) says legislative changes are needed to allow it to regulate storage fee disputes.

“Legislative change is necessary to authorize BAR to adopt regulations to clarify its authority to regulate storage fees charged by automotive repair dealers,” spokeswoman Renee Santos told Repairer Driven News.

“BAR only has authority to enforce laws in the Business and Professions Code and therefore, cannot enforce the provisions of law related to the reasonableness of towing and storage fees, which are located in the Vehicle Code, unless there is also a violation of the Business and Professions Code.”

Because of this, she said BAR proposed during the sunset review process a legislative proposal that would authorize it to adopt regulations to clarify its authority to regulate storage fees charged by repairers.

The proposal is currently included as a provision in Assembly Bill 1263.

Last week, a California repair shop manager came forward with concerns over how storage shop disputes between insurers and customers are resolved.

Andrew Batenhorst, who runs Pacific BMW Collision Center, told RDN that when BAR deems auto storage fees reasonable during times of dispute, it has no way to ensure that insurers pay the full contested amount.

Missing legislation also prevents the Department of Insurance from taking action to resolve such issues, he added.

He said on at least two occasions, this has left customers on the hook for the difference between his shop’s daily storage rate, and what insurers are willing to pay for storage.

Batenhorst said in a follow-up discussion with RDN that any legislation should include clear language in the legislation regarding disagreements with total loss charges.

“The BAR is doing their job by determining what is reasonable but the insurers are able to make their own interpretation of what ‘reasonable’ is independent of the BAR,” he said. “I’m no lawmaker but this just comes down to communication between all the parties involved and accountability for their actions. Body shops need to be fair with their charges and insurers can have a way to get a neutral party to verify.  Insurers should not get the right to take advantage of a loophole to punish people because their opinion is right and mine is wrong.”

Santos said that although BAR has limited oversight on storage fees, it has covered the topic in its newsletters, workshops, and public meetings.

She added that in response to a “growing number of vehicle storage disputes” that includes fees charged by repairers, BAR has established a dedicated email account that insurance company representatives can use to submit issues for review.

“Since implementation in January 2022, BAR has received over 320 referrals, which the Bureau attempts to mediate and achieve a satisfactory resolution and educate the automotive repair dealer, as necessary, on the applicable laws related to vehicle storage,” she said. “The mediation attempts have largely been successful and the review of these disputes has provided BAR greater insight into the business practices of automotive repair dealers that can lead to consumer harm.”


Featured image provided by iStock/gguy44

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