Comments Off on 2021: IIK Leads in Passage of SB 71 -Towing and Titling
2021: IIK Leads in Passage of SB 71 -Towing and Titling
IIK worked with member and non-member insurers to pass SB 71 sponsored by Sen. Jared Carpenter in the 2021 legislative session. The bill was based on the NCOIL Consumer Protection Towing Model Act, and it has been modified to fit KY following discussions among the insurance industry, the towing association, the KY Bankers Association, the KY Transportation Cabinet, and the KY State Police.
SB 71 was designed to deal with several abusive towing and storage practices that affect KY consumers:
- Unsolicited “stop-by” towing.
- Lack of rate transparency and rates that vary if insurance is involved.
- High gate fees and high storage fees due to restricted vehicle access and difficulty in contacting the storage facility.
There was one additional provision in the bill in addition to the towing provisions. A recent ruling by the KY Transportation Cabinet had held that insurers and others could not record a transfer of title or vehicles that they take possession of due to a claim if the prior owner owed property taxes on the vehicle. SB 71 allows title transfers by those other than the prior owner while holding that person responsible for paying the taxes.
Key provisions of SB 71 are as follows:
- Local governments, auto clubs, repossession companies, and others contract towers are excluded.
- Towers are prohibited from stopping at a scene unsolicited except under limited conditions.
- Photographic, video, or other documentation of vehicle damages prior to the vehicle being removed from the tow truck are required for emergency towing.
- For private property towing, vehicle owners may pay 50% of the regular rate to secure the release of the vehicle, and towed vehicles must be taken to a storage facility within 25 miles. Notice of the tow must be given to law enforcement within 2 hours.
- A rate sheet must be provided to the owner if present at the scene of a disabled vehicle and must be posted at the place of business of the towing or storage company.
- A notice must be provided within ten days to an owner and lienholder of a towed vehicle.
- Upon payment, a vehicle must be released to the owner, lienholder, or insurance company representative and physical inspection shall not be refused.
- Storage facilities are required to be accessible during posted business hours.
- Services are required to be recorded on an invoice which shall be retained for two years.
- Storage yards may obtain title to vehicles abandoned by the owners if the lienholder agrees to the transfer.
- Insurers, lienholders, and storage yards may transfer title to vehicles even if property taxes owed by the prior owner are still outstanding. The original owner remains responsible for taxes owed.
SB 71’s effective date is June 29, 2021.