Truck insurance coalition spotlights need for Maryland towing reform

Trucking and insurance stakeholders are working together to address towing practices in Maryland, which they say “effectively amount to insurance fraud.”

Five organizations – the Coalition Against Insurance Fraud, American Trucking Associations, Maryland Motor Truck Association, the Owner-Operator Independent Drivers Association, and American Property Casualty Insurance Association – have formed a coalition to face this growing problem. They say it is not only fraudulent but continues to disrupt the supply chain.

In a letter to Maryland lawmakers, the coalition highlights the issue of “nonconsensual tows,” and how the lack of consumer protection from towing companies continues to make a bad situation even worse.

“One of the problems in Maryland is that there are no rules that prevent towing companies from charging whatever they want,” Mike Matousek, OOIDA director of state legislative affairs, said in a coalition news release. “There is also no viable complaint process for truck drivers caught up in this mess.”

The coalition’s letter also points to the serious problem of insurance fraud throughout the country.

“When towing companies submit an invoice that includes charges for equipment or manpower that was never on scene, that’s insurance fraud, Matthew Smith, executive director of the Coalition Against Insurance Fraud, said in the news release. “This is not a victimless crime.”

As a solution, the coalition supports HB 487, led by state delegates Linda Foley and David Fraser-Hidalgo.

The creation of new rules as well as a robust complaint process will help to address Maryland’s towing issue, according to the letter.

“Motor carriers operating in Maryland have had enough of high-dollar invoices that should realistically only cost a fraction of that amount,” Louis Campion, president and CEO of the Maryland Motor Truck Association, said in the coalition news release. “Not only does this cause irreparable harm to the carrier itself, it contributes to the disruption of our global supply chain.”

After attempting other avenues, the coalition has come to the conclusion a legislative approach is the most practical solution.

“Insurance is subject to a state-based regulatory system, which benefits both consumers and insurers,” Robert Passmore, vice president of auto and claims policy at the American Property Casualty Insurance Association, said in the news release. “It is not unreasonable to think the towing industry should have to play by some rules and we think it can be done in a way that would minimize the impact of towing companies that do things the right way.”

Lastly, this issue is not unique to Maryland. However, now that states are able to directly address this problem, the coalition believes there’s no legitimate reason not to.

“There are a few states that have already address this issue in some way and there are a few more that are in the process of doing something,” John Lynch, senior vice president of federation relations and industry affairs at the American Trucking Associations, said in the news release. “A few years ago, Congress gave states clear authority to fix this as they see fit and we intend to work with states to use that authority.”

A hearing on HB 487 is scheduled for Feb. 10. OOIDA’s Matousek is expected to testify remotely. LL