TN Insurance Bulletin (1988-09-01): Abandonment of Automobile Salvage

NED McWHERTER GOVERNOR STATE OF TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE 500 JAMES ROBERTSON PARKWAY NASHVILLE, TENNESSEE 37219 B U L L E T I N TO: All Auth orized Property and Casualty Ins urer s FR: RE: Elai ne A. McReynolds, Commissioner .~~~ Depa rtme nt of Commerce and Insurance .. f71"l Abandonment of Automobile Salvage DA: Sept emb er 1, 1988 ELAINE A. McREYNOLDS COMMISSIONER It h as been brought to the attention of the Tennessee Departmen t o f Commerce and Insurance that some insurers are abandoning a utomobiles, on which they afford coverage, t o the operators of towing services or salvage yard s after the vehicles hav e been involved in a total loss a nd have been towed fro m t he scene of the accident. The towi ng servi ce or salvage y ard is then left to its own resources t o collec t for the costs in curred where these same insurers do not pr ovide assistanc e i n obtaining a valid and marketable title t o the salvage o r p ay for the towing services or storage. An i nsu red is required by the terms of his policy to t ake reasonable steps following an protect t he covered auto and its equipment from The insur er is obligated under the terms of the policy to p ay reasonable expenses incurred to practices de scribed in the preceding paragraph policy pr ovi sions. personal auto acciden t to further loss. personal auto do so. The violate these It i s the Department's position that ins urers ha ve a contractual obligation on first party claims to p ay reaso nable automobil e t owing and storage fees, and to assi st the t owing and salva ge companies in obtaining a valid title to the auto if the sa lva ge value of the vehicle is offered an d accept ed as payment for these fees. Automobile towing and sa lvage companies ha ve a corresponding obligation to no tify ins urers as soon a s possible of the accrual of storage cha rges on their insureds' a utomobiles ing and storage fees, and to assi st the t owing and salva ge companies in obtaining a valid title to the auto if the sa lva ge value of the vehicle is offered an d accept ed as payment for these fees. Automobile towing and sa lvage companies ha ve a corresponding obligation to no tify ins urers as soon a s possible of the accrual of storage cha rges on their insureds' a utomobiles. If the abandonment o f automobile salvage cont inues to be a problem, the Dep artment will consider tak ing action pursuant to the Unfair Tr ade Prac tices Act, T.C. A. Section 56-8-104(8). EAM/cmf