The Oklahoma Senate passed a bill Thursday that will cap storage fees and restrict administrative charges for total loss vehicles. 

Oklahoma Sen. Lonnie Paxton (R-District 23), an insurance agent, introduced SB641 Feb. 3. It was passed by the Business and Insurance Committee March 6 and received a 32-8 vote on the Senate floor. 

The bill limits administrative charges related to total loss vehicles to four hours. It also sets the maximum daily storage rate an auto body repair shop can charge for a total loss vehicle.  

For the first 10 calendar days, the cap is set at $39 for all motor vehicles of any size, including marine vessels, and $78 for vehicles with a lithium-ion battery that sustained damage to the battery pack or has exhibited fire, smoke, or popping or hissing sounds. 

On the 11th calendar day, the maximum daily storage rate may increase to $75 for all vehicles and to $156 for lithium-ion battery vehicles. 

The maximums do not apply to vehicles that necessitate indoor storage and are approved by insurance companies at an agreed-upon rate in advance. 

Every repair shop will be required to provide written invoices and respond to requests for invoices concerning the pickup, release, or delivery of a motor vehicle on its premises to the insurance company within eight business hours. 

The act would become effective Nov. 1, if passed. 

“Overall, it is a consumer protection act trying to move things in a way that expedites the car getting back out of the shop or getting the claims settled,” Paxton said on the Senate floor. 

There was no debate prior to the Senate vote. 

“We are opposed to the bill in this form,” Brian Shellem, Oklahoma Auto Body Association (OKABA) legislative committee chair, told Repairer Driven News. “This is a bad idea.” 

Paxton has introduced multiple versions of bills that would cap storage rates in the past year. 

His website claims he’s operated an insurance agency for 24 years. An Oklahoma Farm Bureau Insurance site shows Paxton as a registered representative and notes auto insurance as a popular product of his.

Paxton ntroduced two bills (SB1853 and SB1741) last year that critics said would have limited what collision shops could charge for storage fees. SB1853 also would have restricted what shops could charge for multiple standard procedures. Both bills failed to make it through the legislative session. 

Shellem said a previous version of this session’s Senate-approved SB641 was in response to a handful of shops charging an excessive rate for stored vehicles. He said insurance companies also were leaving vehicles in shops for extended periods of time. 

“That’s really where the problem is,” Shellem said. “It’s not cars getting fixed and getting picked up and whatnot. This is typically from total losses and the shops are like, ‘Get these cars out of here.'”

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

Gary Wano, owner of GW & Son Autobody, previously commented on past bills proposed by Paxton. He 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.

Shellem also previously said storage is a cost to repair shops, including protecting the cars with video surveillance.

Electric vehicles can require more costly storage needs.

Damaged EVs involved in a collision should be stored 50 feet from other vehicles and structures because of fire risks, according to the National Highway Traffic Safety Administration.

Isolation bays, which include concrete walls and drainage systems, are recommended for storing damaged EVs.

IMAGES

Photo courtesy of DustyPixel/iStock