An Oklahoma bill proposing a cap on towing and storage fees was passed by the Senate and has moved into a House committee. 

The Automotive Service Association (ASA) released a statement Thursday saying the bill would force repairers to charge storage fees well below the fair market value. It also said the bill would not protect consumers but make it easier for insurers to prolong the repair process.

SB1741 would extend the state Corporation Commission’s ability to set towing and storage fees for non-consensually towed vehicles to include consensually towed vehicles. 

Currently, state law limits the cost of towing and storage fees by a wrecker or towing service and repair shops if the vehicle is towed without the owner’s permission by law enforcement. For example, law enforcement removing a wrecked vehicle from a roadway. 

The bill would extend the same limits to vehicles towed with the consent of a vehicle owner. For example, a vehicle owner asks a towing company to move a vehicle from their driveway to a repair facility. 

Sen. Lonnie Paxton (R-District 23) introduced the bill on Feb. 5. It passed the Senate 38-6 March 15. It was engrossed in the House March 21 and was sent to the Business and Commerce Committee after a second reading March 28. 

Paxton, an insurance agent, also recently proposed SB1853, limiting what collision repair shops can charge for multiple standard procedures and storage rates or fees. The bill has sat in committee since the beginning of February with no movement. 

“Some argue that the Oklahoma legislature should pass S.B. 1741 because it is less egregious than S.B. 1853,” ASA said in its statement. “ASA believes that a bill being less egregious than another shouldn’t be the standard to determine if a bill should become law.”

Paxton said his new bill aims to wrangle a few “bad actors” charging $200-$300 for storage fees. He also said the bill raises the current storage fees on non-consensual tows by about 35%. Consensual tows would be billed the same fees if the bill is approved. 

Maximum outdoor storage rates would be: 

• • $24 for a single vehicle including a motorcycle, automobile, or light truck up to 20 feet in length 
  • $32 for a single vehicle or combination of vehicles more than 20 feet in length but less than 30 feet
  • $39 for a single vehicle or combination of vehicles more than 30 feet and up to 8 feet in width 
  • $55 for a single vehicle or combination of vehicles more than 30 feet in length and more than 8 feet in width 

Maximum indoor storage rates would be: 

• • $39 for a single vehicle including a motorcycle, automobile, or light truck up to 20 feet in length 
  • $47 for a single vehicle or combination of vehicles more than 20 feet in length but less than 30 feet
  • $55 for a single vehicle or combination of vehicles more than 30 feet and up to 8 feet in width 
  • $70 for a single vehicle or combination of vehicles more than 30 feet in length and more than 8 feet in width 

Labor Rate Hero estimates the average cost of daily storage within 25 miles of an Oklahoma City zip code at $119. The average storage cost within 25 miles of a Tulsa zip code is $101 daily. 

“To an independent automotive repairer, there is nothing ‘reasonable’ about being told they can only charge $24 per day to store a vehicle,” said Scott Benavidez, chairman of ASA’s board of directors, in a press release. “Many repairers have had to increase storage fees in recent years because insurance companies are taking longer to complete their claims process, leaving vehicles sitting pointlessly in the shop. These vehicles — especially electric vehicles — take up valuable space in shops and can prevent facilities from accepting other repair jobs. This bill would unfairly harm small businesses and signals an abandonment of free-market principles.”

Brian Shellem, Oklahoma Auto Body Association (OKABA) legislative committee chair, also previously said the fees proposed in the bill are relatively low for most populated areas in the state. He said it doesn’t make sense to hold the entire industry to low rates because of a few bad actors. 

“It doesn’t mean you need to kill the entire industry and overregulate,” Shellem said. 

Paxton has argued that it’s not in the best interest of insurance companies to delay claims. 

Owners and managers of repair shops nationwide have expressed concerns about insurance companies refusing to pay storage costs after delaying the decision to total a vehicle for weeks to months following a shop’s initial estimate that would total a vehicle.

Gary Wano, owner of GW & Son Autobody located in Oklahoma, previously said he has at least half a dozen files where insurers wouldn’t immediately accept his preliminary estimate, which conveyed the vehicle was an obvious total loss. In each case, insurers took multiple weeks and up to two months to agree and finally total the vehicle.

Paxton also has argued that higher costs for storage fees mean higher premiums for consumers. He admitted that multiple things are raising insurance rates. 

Insurers are expected to continue to raise premium rates in 2024 after doing so for multiple years. 

The companies claim pandemic losses from part delays, rising labor costs, and used car values are why they’ve hiked rates in recent years. The rate hikes continually receive criticism from consumer advocacy groups who’ve claimed insurers are overstating needs and overburdening the consumer. 

Shellem added that there are many reasons insurance rates are increasing, including an increasing complexity of vehicle components, such as the use of advanced driver assistance systems (ADAS).

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