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American Family Mutual Sues Tow Companies for Gouging

An insurance company filed five complaints today against various area towing companies for allegedly defauding consumers and their insurance companies.

According to the complaints, the defendant towing company employees would arrive at the scene of an accident unsolicited, offer to tow a driver's car, falsely state that the driver's insurance would cover the towing costs and then later refuse to release the car at the lot until full payment was made of the "excessively high towing, storage and other associated miscellaneous fees."

The plaintiff, American Family Mutual Insurance Company, indicates that, in order to fulfill its obligation to the insureds, it had no choice to pay the excessive fees and, if it did not, its consumers would cancel their policies and the premium would go up for its remaining consumers.

Similar complaints were filed by the plaintiff on Friday, September 4th.  They will be available here in the near future.

To read the complaints filed today, click below.

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nmmmnm said:

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After reading the scans of the legal documents it appears it is just a single insurance company whining about high prices.

From my point of view if I have an insurance policy that states I am covered for the tow I am not going to ask the driver how much the service costs. Those dealings happen in the backoffice.

Also, I am not a lawyer so my comments can be taken from the point of view of a layperson but if the market dictates a pricing scheme for services and a niche of that market is identified and exploited then that is capatalism at its best/worst.

I bet that if there is a niche market for exploitation that the insurance companies can capatalize on, they are all over it.

Thanks for being American Family's mouthpiece Tribune...

jack said:

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The issue is not so much the high prices, is that the tow companies were engaged in ambulance chasing, and in effect fraudulently obtaining the clients' business. Of course, the clients didn't care, since they expected insurance to pay for it. It would be a different situation if the tow companies had directly contracted with the insurance companies, sort of how they do with AAA.

Despite mmmmm's advocacy of capitalism, it isn't unbridled, and Illinois has long had a Consumer Fraud Act. Also, the law has long established that tow companies may only hold a car for reasonable charges.

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