The NICB Steers Towing Ordinance Amendments in Chicago

Automobile accidents or breakdowns can put drivers in stressful situations as they must handle issues with missing work or appointments, liability issues or traffic violations. These high-stress situations provide the perfect opportunity for unscrupulous towing companies to take advantage of consumers.

According to data received by members of the National Insurance Crime Bureau, Chicago ranks as the second most affected major city in the nation for towing abuse. Furthermore, a survey of several insurance companies identified Chicago as one of the “most problematic” cities nationally for towing-related abuses.

The problem in Chicago is severe. On its own, Chicago accounts for 75 percent of all inflated towing and storage reports in Illinois. Further, these reported inflated tow charges and storage fees in Chicago make up 42 percent of similar reports in the entire state of California, a state with more than three times the population of Illinois.

However, we could soon see a solution to this ongoing problem. Chicago’s Committee on License and Consumer Protection is set to hear arguments regarding proposed changes to the city ordinance which would require additional licensing to improve towing safety and beef up penalties for rogue towers that violate the law, with NICB providing testimony.

In part, when renewing or applying for licenses, tow companies must provide proof of a commercial vehicle relocator license, provide a statement certifying the applicant has never been convicted of a felony, and proof of insurance coverage. Once approved, a copy of the license must be placed in plain view within the tow truck and in each office in view of the public. If it is discovered a tow operator falsified or lied on the application the license will be revoked. Additionally, violating accident scene solicitation regulations will become a penalized offense.

Chicago has had a storied past when it comes to towing problems, namely the charging of exorbitant fees, placing drivers in unsafe, precarious positions, and circumventing existing towing laws. Specifically:

  • Excessive towing bills ranging from $3,000 to $5,000. A typical tow from a reputable service is less than $400.
  • In June 2020, six people were injured in a bus accident caused by a tow driver racing to the scene of an accident.
  • Gunfire erupted at the scenes of accidents between rival towing agencies increasing the threat to innocent accident victims.
  • Towers, monitoring police scanners attempting to beat police to the scene, prepare bogus paperwork for victims, stating they are working for a given insurance company.
  • A recent towing scam cost an 82-year-old man $2,000 just to get his car out of a storage yard.
  • Lax enforcement of existing state law passed in 2016 allows for the continued victimization of unsuspecting drivers. 
  • CBS 2 in Chicago investigated the towing scam problem resulting in an investigative series that can be viewed here.

Indiana, Kentucky, California, Ohio and Arizona have all passed legislation aimed at reducing scams perpetrated by unscrupulous tow companies.

And through it all, the National Insurance Crime Bureau Government Affairs team has been a constant force moving concepts into reality by looking for legislative solutions to protect drivers from these scams and dangerous situations. 

As we look ahead, we urge the city council members to look for a solution to protect the public and stop rogue towing companies from taking advantage of policyholders. 

Should you ever need a tow, the NICB recommends drivers to: 

  • Never give permission to a tow truck operator who arrives unsolicited to take your vehicle.   
  • If you or law enforcement did not call a tow truck to the scene, do not deal with that operator.   
  • Do not provide tow truck operators with your insurance information.   
  • Do not provide tow truck operators with personal lien holder information.  
  • Determine that the tow truck signage is identical to what appears on any documentation the tow truck operator provides (they may say they “work with” your insurance company).   
  • If the tow truck does not display signage identifying the name of the tow company, ask for company identification.   
  • If a tow operator’s legitimacy is in doubt, call the police.   
  • Do not give a tow truck operator permission to tow your vehicle until they:  
    • Provide a printed price list, to include daily storage fees and miscellaneous charges that will apply if they tow your car (if the prices seem too high, ask the police or your insurance company to call a towing service for you).  
    • Provide printed documentation indicating where the vehicle is being towed if it is not a location of your choosing.

Anyone with information concerning insurance fraud or vehicle theft can report it by calling toll-free 800.TEL.NICB (800.835.6422) or submitting a form on our website.

About the National Insurance Crime Bureau: Headquartered in Oak Brook, Ill., the NICB is the nation's leading not-for-profit organization exclusively dedicated to combatting and preventing insurance crime through Intelligence, Analytics, and Operations; Education and Crime Prevention; and Strategy, Policy, and Advocacy. The NICB is supported by more than 1,200 property-casualty insurers, self-insureds, rental car, vehicle finance, and auto auctions. To learn more, visit www.nicb.org.