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Crash hunters

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Pavel Kuba’s experience is not uncommon. About a year ago, he crashed his car in Prague. Before he had the chance to report it to the police, a Škoda Fabia wrapped in logos reading “accident services” arrived offering to tow the vehicle away, provide a car and handle insurance refunds. As the owner of a one-man towing business in Prague 9, Kuba sees the swift arrival of the Fabia-packaged assistance deal as healthy free-market competition. For insurance companies, though, towing services that don’t have contracts with them or dispatch centres cost money and tarnish the reputations of indemnity providers, says Jana Čechová, the media representative of the Czech Insurers’ Bureau. So, after two years of planning, the Czech Insurance Association devised a definition and a plan to target the towing and assistance services not partnered with their members: The organisation tagged them as “pirate” and seeks to eliminate their kind by streamlining partner services so that they all fall under one phone number, one dispatch office, one call centre.

This radical restructuring of the system of car-accident services is due to launch as a yearlong pilot project in September. The Czech Insurance Association’s idea – endorsed by the Czech Insurers’ Bureau, Road and Motorway Directorate, and the State Police – the “accident centre” essentially unifies partner assistance services to all indemnity providers via a single a number. The umbrella call centre should simplify the post-accident process for both drivers and police officers and prevent situations in which a driver is “left behind at the mercy of suspicious a firm from the street”, Čechová said. “The centre is comparable to a taxi dispatch service that sends out an approved vehicle for a reasonable price, while an anonymous taxi driver who happens to pick you up on the street can cheat you.”

But a number of longtime towers regard it as an unfair attack on their sector – a moneymaking pet for insurance companies rather than an effective corruption-buster. “At the beginning, I was a big supporter of the centre because I though it would drive out the poachers, but I think they’ll get to the client before a police officer does, anyway,” said Aleš Kalík, who’s been in the business since 1995 and heads the Brno-based assistance service Moravskoslezská. “The only thing that would force them out is if the customer was told when signing a contract with insurance to call the insurance’s partner assistance service if an accident happens and to learn that number by heart.”

Tucked away just off the D1 highway in Průhonice, Gallileo Assistance is not concerned about losing business once the centre opens. With 15 cars cruising high-risk routes, a network of between 5,000 and 6,000 informants – including taxi drivers, couriers and delivery services – and access to the public camera system installed on Prague’s streets, the 3-year-old assistance agency that provides towing, legal help, and repairs has strong roots. “The clients don’t find us: Rather, we find them ourselves,” company head Martin Kosina, said. During the two-minute walk from his office to a hotel lobby bar, his mobile phone rang three times, each a new accident being called in.

Gallileo Assistance, Kosina says, has thousands of satisfied customers and perhaps dozens of infuriated ones. The disgruntled bunch has, in fact, set up a website to show negative experiences with the company’s services in an attempt to warn others. “On 1 April 2009, I had a car accident in Prague and this assistance service misused the situation, arriving at the scene before the police (without anyone having had called them),” Jan Opluštil writes, for example. “They offered everyone involved all-around service for free on the spot, saying that it will be paid for from the damage liability insurance, but it turned out that they billed my indemnity account.”

Kosina says that Gallileo Assistance strives to minimise surcharges for customers despite the tendency by insurers to pay out the lowest amount possible, which particularly becomes an issue with car leasing. Gallileo charges CZK 1,000 a day for a substitute vehicle, but most insurance companies are only willing to reimburse CZK 300, Kosina says. “According to the conditions, insurance often pays for the services of assistance centres at a rate worth no more than the prices paid to partner providers,” the Czech Insurance Bureau’s Čechová explained. “The parties in the accident have to pay for the rest – and it’s not uncommon that the bill is 30-50% higher [than insurers offer].”

Hurling labels like “hyenas” and “poachers” when referring to towing and assistance services that roam streets hunting for accidents, Brno’s Kalík has little sympathy for the companies that snatch deals from him and the call centre he is partnered with. Čechová notes that such poachers often bill the insurance company of the driver found to be at fault or excessive sums of money. “Sometimes they will go as far as filing an invoice for a service that was never provided,” she said, placing insurance companies’ losses at tens of millions of crowns a year.

The Czech Insurance Bureau estimates that there are a few dozen pirate companies in the country. The number is much lower than that if you ask Antonín Zeman, who didn’t want the name of his towing company published but points out that it’s a legitimate provider contracted by all of the major assistance services in the country. “I personally don’t know of any,” he said, adding that the label “pirate” for towing firms is unfounded if all it merely refers to are businesses without insurance contracts.

“For me, pirate towing services don’t exist,” concurred Jiří Malý, the owner of a towing firm Dinotruck in Prague 5. “It’s simply towing services trying to adapt to the market environment.”

Towing for bit of cash
About 50% of Kalík’s deals come from partner assistance centres that hire a network of towing firms to dispatch when an accident happens. The pay, though, barely covers expenses, he says. For example, Zeman says that to tow a vehicle that weighs less than 3.5 tonnes, assistance centres on average pay their partners between CZK 15 and 18 per kilometre without tax, and some also collect a 10% fee. “Just to compare: A quality Mercedes Atego tow truck costs CZK 1,800,000 before tax, uses 20 litres of fuel per 100 kilometres and requires flat operational expenses of CZK 6 per kilometre,” he said. “Given this, even the uninitiated can see that if we also add expenses for labour, the road tax and other administrative fees, the assistance company has crossed reasonable limits, pushing towing services into a position of economical distress.” Assistance centres are competing for insurance contracts by offering the cheapest service on the market, Malý adds. So, they resort to cutting pay for their towing partners. Zeman notes that, with some assistance services, the price per kilometre hasn’t risen in over seven years.

Ladislav Fraibiš, who has run a small towing business in Prague 4 since 1992, is a sworn rebel fighting assistance centres and insurance companies and instead relies on repeat customers, gigs for auto-repair shops and repo jobs. “I have an expensive truck and won’t let [assistance centres] dictate a price of CZK 500,” said the bulky man, who sported red overalls on that day and has been behind the wheel of his truck for “100 years”. Since he retired his 13-year-old Avia truck in 2005, Fraibiš drives a bee-yellow Renault model that he takes great pride in, be his joy the godly view from the driver’s cabin or the gleaming paint job. Though demand has shrunk, Fraibiš says that Prague traffic still pays his bills as long as he has three to five gigs a day.

With a truck worth CZK 1.2 million, he feels justified advocating for higher fees than those who have smaller platform beds or mere pickups with trailers. But, he says, assistance centres don’t distinguish between the quality of the service, paying a flat rate to all towing contractors. “[Many drivers] found out they can make money off of it,” he said. “It’s enough to buy a trailer – plus, their expenses aren’t very high.”

The poor pay has also left Malý disenchanted. He feels that there is no incentive to invest in new technology. “I don’t feel like purchasing anything, renewing anything,” he said, sighing over a topic of conversation that “enrages me every time. I am capable of driving according to their prices. I can compete, but, if you want a stronger hydraulic arm, I won’t invest in it.”

With the coming of the new call centre, the current towing system not connected to insurance contractors won’t collapse, Malý said, after he’d calmed down a bit. But the quality of services might drop, diminishing the difference between the despised low-cost towing businesses and those “truthful to their cause”, as Kalík puts it. Kosina of Gallileo Assistance says that he would endorse the accident centre once assistance services declared transparent criteria for admitting partner companies, which would eliminate unprofessional service for low rates.

Police pets
That assistance and towing firms have informants inside the traffic police is no secret. The head of the traffic police, Leoš Tržil, welcomes the new accident centre for this very reason: It should curb corruption regarding information trading with the police. Most recently, on 2 and 3 June, the police arrested five officers of the traffic agency for leaking information about accidents to private assistance centres in exchange for “tens of thousand crowns a month”, ČTK reported on 3 July. Former Interior Minister Ivan Langer told the wire service that some were paid by the piece, others at flat rates, making about CZK 3,500 for a 12-hour block. Text messages that gave details about accidents ranged in price from CZK 30 to CZK 450 per officer. In this context, Nova television broadcast the inspectors’ video footage showing an assistance vehicle arriving a minute after the accident notice came through. Another five arrived within the next 10 minutes, then the police.

“I know that [at accident scenes] it’s a real fight, that [towing services] are willing to trash each others’ cars,” said Jakub Vlášek, of a towing and assistance company based in Šumava. The problem is that current legislation does not specify whom an officer should contact when a car accident takes place, Tržil says, while the new system obliges the police to contact the one call centre, the lone number, ridding the police of decision making and the subsequent accusations of favouring specific assistance or towing firms. Insurers, too, welcome the responsibility shift, Česká pojišťovna spokesman Václav Bálek says, quoting a year-old study that showed that police officers called to an accident advised a mere 1% of drivers to turn to their insurer’s partner assistance centre for help.

But the new system won’t seal key money leaks, Kalík argues. “The poacher will always be there first. He doesn’t get the information after the police arrive: He knows about the accident a minute after the police officer knows. The officer hasn’t gotten into his car yet, and the poacher is already there.”

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