Insurer’s refusal to pay excess body shop storage fees upheld (US)
A Massachusetts Appeals Court refused to allow a class action against an insurer accused of deducting excess body shop storage fees for vehicles deemed total losses because the policy wording permitted the deduction. Under the policy, the insurer agreed to pay for “reasonable expenses incurred” if claimants do “whatever is reasonable to protect the automobile from further damage or loss”. A later policy addition agreed that the insurer “will also pay reasonable and necessary expenses for towing, recovery and storage of your auto”.
The claimants willingly chose to have their vehicles towed to repair shops outside of the insurer’s referral network. The shops they selected charged daily rates far exceeding those negotiated between the insurer and its in-network shops. The insurer led evidence that the standard daily storage charge in the market was $35. As that was the only evidence, it was held to be the reasonable storage expense that the insurer was required to pay.
Michelle Puopolo & others v Commerce Insurance Co. case no: 21-P-718 Massachusetts Appeals Court