Storage Fees and Insurer Referrals

Protection of the public is the primary mission of the Bureau of Automotive Repair (BAR). In carrying out this mandate, BAR’s Field Operations and Enforcement Division utilizes numerous strategies to monitor the business practices of automotive repair dealers (ARDs). Tactics include monitoring online advertising, reviewing Smog Check data, and most importantly, mediating consumer complaints. A recent addition to BAR’s toolbox for monitoring industry practices is a dedicated email address ( for insurance companies to submit referrals to alert BAR of transactions where the insurer believes an ARD is charging unreasonable or excessive storage rates and fees.

Since creating the dedicated email address in January 2022, BAR has received over 110 referrals from insurance company representatives. The majority of these referrals have involved a dispute or disagreement between the insurer, ARD, and/or the customer due to a misunderstanding or lack of communication. With these referrals, BAR has worked to mediate an equitable and timely resolution between the parties.

Some referrals have revealed concerning and/or unlawful practices. Seven businesses were found to be operating without a valid ARD registration. In each instance, the businesses were operating in violation of Business and Professions Code section 9884.16, which precludes a business from the benefit of a lien for labor or materials, including storage fees, unless the business is in possession of a valid registration.

BAR is also finding many of the disputed transactions or disagreements between the parties are arising from an ARD’s attempt to improperly charge storage fees in circumstances that do not allow for storage. This includes attempting to charge for storage while the ARD is waiting for an insurer to inspect the vehicle. As discussed in the Storage Fees and Lien Sales article published in the Spring 2019 Automotive Repair and Smog Check newsletter, storage fees are not allowed while repairs are ongoing. Additionally, storage fees cannot begin to accrue until all repairs estimated and approved by the consumer have been completed and the consumer notified. In transactions involving a teardown, pursuant to Title 16, California Code of Regulations section 3353(c)(2), the teardown is not considered complete until an itemized estimate for parts and labor necessary for the specific job has been provided to the consumer.*

Another area of concern is when the insurer fails to promptly retrieve the vehicle after it has been declared a total loss. In these instances, best practices require that the ARD be in frequent contact with the customer, advising them that storage will continue to accrue until the vehicle is retrieved. Additionally, the ARD should encourage the customer to contact their insurance company and urge the insurer to retrieve the vehicle as soon as possible after the determination of a total loss.

As with most disputes between customers and ARDs, storage fee issues can often be avoided if there is frequent communication with the customer and a record of the communication is documented on the work order and final invoice. Refer to Vehicle Code section 22651.07 for information on invoice requirements for towing and storage services, and Vehicle Code section 22524.5 for determining the reasonableness of storage fees and rates. Refer to BAR’s Write It Right guide for information on documentation requirements for all estimates, work orders, and invoices.

To learn more about the results of the referral program, view the Storage Fee Referrals presentation given at the July 2022 BAR Advisory Group meeting.

*See the Documenting Collision Teardown Estimates article for an overview of teardown estimate requirements.

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