No Further Appeal On Insurers Deducting Excess Storage Fees From Total Loss Settlements

Appeals Court decision on auto insurers offsetting excessive storage charges against insured’s total loss payment becomes final

In its May 3, 2022 article on the Appeals Court decision, Puopolo et al. v. Commerce Insurance Company, holding that auto insurers could deduct excessive storage fees charged by independent body shops from an insured’s total loss payments, Agency Checklists informed its readers that it would monitor any plaintiffs’ request for additional appellate review.

Application to Supreme Judicial Court to review the Puopolo decision denied

As predicted, the Puopolo plaintiffs filed a timely application for further appellate review on May 16, 2022. Commerce Insurance filed its opposition on May 26, 2022. After holding the application for five weeks, the Supreme Judicial Court denied further appellate review on June 30, 2022.

The Puopolo decision allows the offset of excessive storage costs from an insured’s total loss payment

Based on the SJC’s denial of further appellate review, the Puopolo decision is final. The ruling states as the law that a vehicle insurer may reduce a total loss payout made to a first-party insured if a nonpreferred independent body shop the insured chose charges excessive total loss storage fees.

In the Puopolo case, Commerce persuaded the judge that $35 a day was a reasonable fee for total loss storage in light of a statute and the rates offered by its eight hundred preferred body shops. The Court agreed with Commerce’s legal position that Commerce could pay the nonpreferred body shops their higher storage rates to have the total loss released by the body shop but then recover its over-payment, to the extent it was unreasonable, from the insureds’ total loss payment.

For a more detailed analysis of how the Puopolo rules might affect an agency’s insureds or insurer’s handling of excessive total loss storage charges, see Agency Checklists’ May 3, 2022 article, 5 Points On New Ruling: Unreasonable Storage Reduces ACV Payment.