Insurance companies have balked at reimbursing drivers, calling the prices unreasonable.

Robert Scott’s friend was driving his Toyota Hilux SUV when it got rear-ended at a red light in April. The friend went to the hospital, so a police officer called for a tow truck.

Scott later called the tow company, All Island Automotive Towing, to ask for the bill, but they wouldn’t tell him over the phone.

So Scott went to the company’s lot in Pearl City but was told that only his insurance provider could pay for it, and the company wouldn’t give him a receipt detailing the costs.

After half an hour of negotiating, Scott got permission to pay in cash.

That’s when he found out the bill was $1,172.

“I don’t usually get that kind of angry,” Scott said.

His insurance company said it wouldn’t reimburse him, calling the charges unreasonable. 

gate closes Makepono All Island Automotive Towing invoice
An All Island Automotive Towing invoice from January showing the additional $900 fee that is only permitted in special conditions. The state is investigating concerns about the charge’s potential abuse. (Kevin Fujii/Civil Beat/2023)

Below the “Towing charges” ($172) and “Storage charges” ($100 for 4 days in the impound lot), lurked an additional figure beneath an unspecific “Charges”: $900.

“Why is it a thousand dollars?” Scott asked.

He’s not the only one asking that question.

Since January, All Island Automotive Towing has charged at least 120 people, including Scott, with that special fee or multiples of it, totaling at least $100,000, according to data shared with Civil Beat by Johnny Ha, a Geico insurance company field supervisor who’s challenging the charges.

But the fee appears to be charged much more frequently. Several insurance companies, including Geico, have brought the charges to the attention of the National Insurance Crime Bureau, a nongovernmental organization that investigates insurance fraud.

The state Office of Consumer Protection is now looking into the matter, but the office’s executive director, Mana Moriarty, declined to comment on a pending investigation.

Honolulu may amend its 6-month-old towing contract with All Island in part over the public’s concerns that the contractor is charging what may be well beyond what is permissible under state law.

All Island Automotive Towing pays the city $3,000 a month for the exclusive right to tow.

The contract, which took effect Jan. 1, allows the tow company to charge a $900 fee for every 15 minutes of work after the first quarter-hour of hooking up a vehicle.

But state law limits how much tow companies can charge: $65 per tow, $7.50 per mile, $75 for a dolly, $25 for each of the first seven days a car is in the lot and $20 for each day thereafter.

Companies are not authorized to charge other fees, except for “reasonable amounts for excavating vehicles from off-road locations,” according to another law.

Robert Scott’s insurance company refused to pay out his claim after his vehicle was towed from a rear-end collision. His damaged SUV is shown here being towed away from the All Island impound lot. (Courtesy: Robert Scott)

Ha, the Geico field supervisor, hadn’t seen such large towing bills before this year. Geico has paid some of the bills but has recently taken issue with the charges.

“There’s no incentive to be expedient,” Ha said of the tow operators. “The difference between the 15th and 16th minutes, it’s 900 bucks.”

Paul Perry, the co-owner of All Island, defended the fee, insisting that towing is a dangerous business as well as a service overlooked by the public which nevertheless deserves high pay.

Perry, reading from a statement, denied that his business is improperly charging people.

‘Difficult Hook Ups’

Honolulu Department of Customer Services Director Kim Hashiro said All Island is just following the contract when it comes to the $900 fee.

As part of the contract, the city asked the company to list what it would charge for a “non-statutory and difficult hook up,” for every 15-minute increment after the first 15 minutes of “active hook up work.”

It’s meant to set the maximum the company can charge in a tricky situation, like pulling a car out of a gulch, Hashiro said.

“We can’t tell by just looking at the invoice if the contractor is abusing that charge,” Derek Mayeshiro, deputy director of the Department of Customer Services, said.

He said the department has only investigated 10 or fewer complaints but that the agency understands the concerns being raised and would look into them.

Hashiro said state law does not regulate the “non-statutory and difficult hook up” charges.

“I wouldn’t call them unlawful. It’s just that they’re not in the statute,” Hashiro said.

Any changes to the contract would take at least a few months, she said.

“We’re very open to that if it’ll help clarify for consumers as well as for the vendor what they’re able to charge for and how much,” Hashiro said. “I think it’s a learning process at this point about how this works.” 

gate closes Makepono All Island Automotive Towing
All Island Automotive Towing pays the City and County of Honolulu $36,000 a year for the exclusive right to tow in the current contract. One of its impound lots is located beyond this gate. (Kevin Fujii/Civil Beat/2023)

Honolulu Department of Customer Services leadership met with the tow company Wednesday to discuss the public’s concerns and chart a path forward.

Hashiro insists that the contract complies with state procurement law and statutory requirements and that the Department of Commerce and Consumer Affairs website, which says tow companies can’t charge additional fees, “needs to be clarified.”

The tow company has been occasionally discounting certain accounts charged the $900 fee, Hashiro said, but now she intends to further clarify towing rates online, examine towing invoices and to talk with the DCCA.

‘In The Eyes Of The Beholder’

Perry, the tow company owner, said whether the fee is reasonable is “in the eyes of the beholder.”

“If you were to stand on the freeway, with motorists passing by for 16 minutes or longer, do you think standing there for $900 is reasonable?” he said.

According to Perry, the clock that triggers the $900 fee runs not only when pulling a vehicle out of a hard-to-reach culvert or gully, but also while cleaning up parts and fluids left in the aftermath of an accident on a normal road.

“Everything we do on the scene is all part of it,” Perry said.

He said the off-road location is an example and not every scenario can be specified in the law.

Perry believes the figure is “inexpensive” because of “the amount of lives we lose trying to do our job and the injuries we sustain.”

None of his employees had been injured or killed on the job this year, he said.

All Island Automotive Towing started making use of the special fee in the early hours of the Jan. 1 right after the new contract kicked in.

Around 3 a.m. the tow company dragged away a 2013 Toyota Highlander from a traffic accident in the H-3 westbound tunnel. What might have been just a $347 job the day before was charged at $1,247.

Almost an hour later, the company towed a black 2006 Mercedes Benz SUV that was in an accident near Punahou. What a day before had been just a $232 job was billed at $1,132.

In January, Geico received 28 invoices from All Island Automotive Towing that included at least one “recovery” charge of $900. Those fees alone totaled $33,300. Two tows, that included an $1,800 recovery fee, were then discounted $500. Another with a $2,700 recovery fee was discounted $660.

All Island Automotive Towing truck Makepono invoice
All Island Automotive Towing began using the new fee as soon as the contract became effective in the early hours of Jan. 1, 2023. (Kevin Fujii/Civil Beat/2023)

Geico and several other insurance companies approached Scott Slagle, an investigator with the National Insurance Crime Bureau to look into the $900 fee for evidence of insurance fraud. But since the fee is in the city contract, it’s not a criminal matter, Slagle said. 

“It’s going to be between the legal departments of each insurance carrier, the city, and All Island that’s going to have to take a look at the contract,” Slagle said.

Exactly how many vehicle owners were charged the $900 fee at least once is unclear. The company reported 6,573 vehicles were towed in the first six months of the year.

All Island Automotive Towing landed the contract despite a prior lawsuit in 2018, filed against the company and Honolulu by the Department of Justice.

The DOJ found that the city and All Island Automotive Towing had auctioned off or disposed of 1,440 vehicles belonging to military service members while they were deployed between 2011 and 2016. Without first obtaining a court order, their actions violated the Servicemembers’ Civil Relief Act, according to the DOJ.

The parties reached a settlement, requiring the city to change its procedures, pay three service members a total of $55,858, set up a $150,000 fund to compensate other service members, and pay a $60,788 penalty to the federal government.

Help power our public service journalism

As a local newsroom, Civil Beat has a unique public service role in times of crisis.

That’s why we’re committed to a paywall-free website and subscription-free content, so we can get vital information out to everyone, from all communities.

We are deploying a significant amount of our resources to covering the Maui fires, and your support ensures that we can pivot when these types of emergencies arise.

Make a gift to Civil Beat today and help power our nonprofit newsroom.

About the Author