Canadian Underwriter

How Intact lost this battle over vehicle storage fees

May 16, 2019   by Greg Meckbach

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Canada’s largest P&C insurer has suffered a setback in its quest to minimize vehicle storage fees.

A recent Ontario court ruling means that, for the time being, Intact Insurance has to pay J.P. Towing Service & Storage Limited storage fees of $70 a day after Intact-insured vehicles are recovered after accidents.

In 2012, Intact “took exception” to J.P. Towing’s $70 daily storage fee, Justice Laurence Pattillo of the Ontario Superior Court of Justice wrote in J.P. Towing v. Intact, released May 1.

J.P. Towing is contracted by the Toronto Police Service to tow vehicles which are abandoned or involved in a collision. The company charges $180 for towing and $70 a day for storage, Justice Pattillo wrote.

From 2012 through 2018, Intact made 108 applications, on behalf of auto insurance clients, to court under Section 24 of Ontario’s Repair and Storage Liens Act. In each case, Intact was asking the court for a certificate giving Intact possession of a vehicle stored by J.P. Towing, while the dispute over storage fees was being resolved.

Other insurers have also made similar applications against J.P. Towing.

In 2016, a Small Claims Court judge ruled in favour of J.P. Towing over the $70 daily storage rate that the towing company charged for a vehicle owned by one particular Intact client – Christopher Sherwood.

The more recent separate Ontario Superior Court of Justice ruling released May 1 means that the 2016 small claims court ruling — J.P. Towing Service & Storage Ltd. v. Christopher Sherwood — effectively applies to other disputed storage fees involving Intact.

This is because in J.P. Towing, Justice Pattillo ruled that the legal concept of issue estoppel applies to the Sherwood ruling.

Issue estoppel essentially means that a decision has already been made on the same question involving the same parties and that previous decision is final.

Justice Patillo’s May 1 ruling was on a series of motions brought by J.P. Towing.

As a result of his finding (on issue estoppel) in favour of J.P. Towing, Intact has to pay J.P. Towing nearly $37,000 in legal costs.

The May 1 decision, however, was not entirely against Intact. Justice Pattillo declined to award J.P. Towing $1 million in punitive damages, finding that Intact’s conduct was neither high-handed nor malicious. He also found that Intact was not being vexatious in continuing to dispute the $70-a-day storage fees.

Intact had argued the 2016 Sherwood case was about the fair value to store Sherwood’s vehicle only. But Justice Pattillo found that Intact had understood that it would be bound by the 2016 Sherwood decision on the daily storage rate with respect to Intact’s auto clients.

In 2013, lawyers for Intact and J.P. Towing agreed that they would select a test case and the result would be “persuasive” on remaining cases. Sherwood was selected as that test case.

“The agreement between the parties preserved each party’s right to appeal any decision (which was not exercised in Sherwood) and following the decision, the parties could settle the remaining cases or determine the appropriate course of action,” Justice Pattillo wrote. “To the extent that the remaining cases concerned issues regarding the towing fee or the number of days of storage, those issues remained alive and were not resolved by Sherwood. They would have to be resolved or litigated. However, as between J.P. Towing and Intact, Sherwood settled the issue of the daily storage rate at $70 a day.”

Minimizing towing and storage costs is one way auto insurers have addressed claims costs.

In 2015, the Ontario government passed Bill 15, the Fighting Fraud and Reducing Automobile Insurance Rates Act, which changed several laws. One result of that omnibus bill was that under the Repair and Storage Liens Act, vendors can only store vehicles for 15 days (down from 60) after an accident without giving notice to the owner.

Bill 15 made numerous other changes affecting auto insurance. One result is that disputed accident benefits claims now go to the Licence Appeal Tribunal instead of the Financial Services Commission of Ontario.

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19 Comments » for How Intact lost this battle over vehicle storage fees
  1. william hazelton says:

    Really, $70.00 a day to store. (park) a car? There is nowhere in Canada that you would be required to pay that kind of money to park a car. Maybe it is time to sue the city of Toronto for agreeing to such rates.

    • Oluf says:

      You pay rent for a compound, insure it and maintain it 24hes a day and see why they charge $70. It’s not public parking, it’s an impound

  2. Jim Kozak says:

    I believe that if the police call the towing company, they charge more than double their rate as an emergency and storage rates are affected accordingly, however if the consumer calls a tow truck which comes out equally as fast, the customer can then have it taken to a body shop and left there likely at no cost as the shop has a potential customer. The police should advise the driver to make arrangements to have their vehicle towed as new cars have road side assistance built in & a lot of people subscribe to CAA which has free towing.

    • Ken Walker says:

      I had an insured accident with my car a year ago during a microburst rain event. I called CAA for a tow to a car dealer repair shop 40 km away. The dispatched company arrived and “suggested” I have him tow the car to his local lot and then he would drive me home to get dried off faster instead. He then had the adjuster come to his location in rural NS instead of Halifax and charge $90 per day storage for 6 days greatly inflating the cost of the claim.

      I will continue to call CAA as a consumer but will not use that tow company again who’s practices drive up the cost of everyone’s insurance.

  3. K says:

    You have to blame the lawyers for the insurance company to a large degree. How can you not talk some sense into the judge that $70/day or $2100/month or $25200/year to store a car is a little much? You can store a car inside for an entire winter for a few hundred. Maybe the insurance companies don’t want to win?

  4. Andy says:

    Everyone needs to understand that this 70/day is not JUST storage. There is cleanup and maintenance of the lot. Often damages to the lot due to broken vehicles. Oil spillage from vehicles that requires cleaning of the lot. The insurance company spent 121k on the court file so they tried their hardest to prove otherwise. Judge ruled based on facts. With minimum wage gone up to 14/hour i think the storage rate should be at 80/day.

  5. S says:

    Hi Andy, how is that any different than any other parking situation? A downtown heated parking garage would deal with every one of these problems, and they charge $20 a day, while offering heat and power on top of it.

    It’s got nothing to do with the insurance companies – they hate it, but they have no choice because they are required to deal with the insured’s vehicle by law. These storage companies are taking advantage of people at the worst time. Even at 15 days before they even have to give notice, at $70 a day that’s still $1050. You wonder why insurance premiums are high? Here’s one factor that’s spiking them up that can be addressed.

    Think of it like this… if you pay $1000 in towing and storage fees on every claim, and 1 in 10 vehicles have a claim every year, that means $100 of your insurance premiums are going straight to paying for this – and that’s not counting the cost of having someone at the insurance company dealing with these tow and storage companies to get the vehicles out and off these overpriced lots.

    • Paul says:

      How is this different, a parkIng garage does not need a 100,000 dollar truck to move the cars in and out of the structure, they do not need staff on site to deal with the payments and releases of the vehicles each and everytime. They do not need to carry the same insurance as tow companies get hit with. Environmental cleanups from the cars that are in accident leaking fluids.

      So 70 a day is not totally unreasonable and if the courts ruled it is fine then we all have to live it and move.

      It is not the claims that drive insurances prices up, it is the executives salaries and the stupid costly court cases like this one.

    • Hooker Bear says:

      Think again; how valuable is the road you drive on? The cost to your economy of 1 lane closed on the 401 runs into the millions of dollars very quickly, not to mention the fact that secondary accidents kill many people.
      Tow is called by police for REMOVAL! Road must be cleared. Police get this done for free by giving tower a lien on your car and an implied promise that you will pay. They do not care about you or your car.
      How does it happen that cars are towed right under the police’s nose – their authority – and no one seems to know where they are going? The police don’t seem to know.
      half the cars towed don’t have collision coverage. Most of those cars were junk before they got smashed. Most of them get abandoned in the tow yard.
      That storage fee is relative to the value of your road. Abandonment is a social problem just like shop lifting – the paying consumers get the bill in the end.

  6. Rich says:

    Average storage lots do not have to carry the same insurance coverage that a tow company does witch on average is $600 per month per truck plus all other coverages and if your car is smashed and leaking all kinds of fluid good luck with parking it at green P

  7. leo says:

    after reading this im afraid im in that situation… my car was been tow by random tow truck because police told me to go with them. I was trying to get my car back 1 week ago for repair but they keep on delaying for over 1 month… last week i went to the shop everyday they keep on giving same excuses and dont want to repair my car….im screwed…I hate those repair shop and tow truck companies. Even the police are working with them. I saw the OPP car park inside their garage. OMG… corrupted and wicked system..

  8. Kevin says:

    Wow it’s a business not some Peter pan charity. If you drive drunk and get your car impounded for 7 days you should pay $1000 plus because your an idiot. If you are in an accident you have insurance for a reason. If you are at fault and don’t have collision coverage you probably suffer from “it’ll never happen to me” syndrome, or drive a cheap disposable car. Clean your stuff out (They cannot hold the contents of the car hostage legally), sign it over to them so they can scrap it, and go buy a different car.

  9. Jason says:

    I find this reasonable if you do the math. For the sake of example I’m not in the city but local company just purchased a new truck 133000 plus tax. Paid off in three years. Works out to be about 50000 a year in payment. Average call is about 60 dollars but you have to pay the driver 30%. That 1 truck has to do nearly 1200 calls a year just to make the payments on the truck. Not to mention insurance and fuel and maintenance. So where do they make their money. Storage is where. But let’s not forget the cost to rent and maintain a yard. Unless the regular customer is willing to start paying 100 hook and 5 bucks a km then they will make their money on insurance accidents.

  10. M. Brigley says:

    You think the storage rate is too high, consider the fact that the compound pays taxes as well as insurance to protect your vehicle and contents while the adjusters come and do the appraisal, then they are told where to take it for repair. I don’t think 50.00 to 70.00 per day is too high as this gets the insurance out and get the repair process underway.

  11. Dom says:

    J.P towing has the police contract. So they bid and their bid was accepted. Also the storage includes 24 security. Your car and your belongings are in a secured lot and are safe. Insurance companies dont care about the car or the client they insure they only car about making money.

  12. Brett ferguson says:

    Go buy a $150,000.00 tow truck then 6 to 10k a year to insure it buy property and pay property tax and up keep and ins. And liability ins. On that property put fuel in your truck.. then go charge $20.00 @ day for storage see how long your in business folks.. good luck I’ll buy your truck and lot when you go bankrupt

  13. Michelle says:

    There is so much misinformation in the comments.
    First, $70 per day for storage of a collision damaged vehicle is not at all unusual, nor is it excessive. The lawyers for Intact actually took the position that $60 per day was the industry standard, so effectively, they went to court to fight against paying an additional $10 per day.
    Second, you cannot compare a parking lot for an undamaged vehicle (downtown) since it is illegal to park a wrecked, damaged, dismantled or otherwise inoperative vehicle in a public or private parking lot, it must be parked in a lot licensed by Municipal Licensing for vehicle storage. Also, many Green P lots charge $3 – $4 every half hour for parking, many with no daily maximum.
    Third, the Repair and Storage Liens Act states you must notify the owner of the vehicle whereabouts within 15 days IF you receive the vehicle from someone other than the registered owner or someone having permission of the registered owner. This means that the storage facility almost never needs to notify anyone of the whereabouts of the vehicle following a collision because the owner of the vehicle already knows where it is. The insurance company also knows where the vehicle is 99% of the time within 24 hours of the collision.
    Intact insurance paid thousands of dollars in legal fees in the Small Claims Court to save $10 per day in storage and then paid tens of thousands in higher court because they chose to ignore the ruling of the Small Claims judge. When you are frustrated by ever increasing insurance rates, remember that. Intact could have simply paid the extra $200 – $300 that JP Towing was initially requesting and be done with it. Instead they paid 100 times that amount to pay what JP Towing originally requested anyway.

  14. Eric says:

    If parking garages only charge $20/day maybe the insurance companies should have the cars moved to one and see how that turns out!

  15. Stephen says:

    I have seen both good tow shops and those who overcharged. It is amazing that some towing companies can supply a 30 ton tow truck for $115 u s per hour or 153 cd per hour other are $300 cd per hour plus extra fees. The problem on storage fees is partly because of the very high cost of towing and storage insurance. I have too many time the insurance companies leave the towing company with a wreck worth less than the tow bill. I have seen many insurance companies cheat both the home and auto claims. I am protesting against them at Queens park 7168604681

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