Operating a tow truck comes with some financial risks. That’s why getting the right insurance for your towing company is vital. You’re on the hook for protecting not only yourself and your truck, but also anything else that you’re towing behind it. Commercial coverage can be among your major business expenses, so it pays to compare the coverage you need and find a rate your business can afford.
How much is towing insurance?
Your actual cost will vary depending on your insurance provider, the amount of coverage you need, where you live, your credit score and your truck make and model, among other factors.
|Type of business||Average monthly cost per truck|
|Auto repair or body shop||$625|
Compare tow truck insurance
What does tow truck insurance cover?
In most ways, towing insurance is the same as your standard auto insurance policy. Among standard tow truck insurance coverage, you’ll find:
- Liability insurance. The most basic type of insurance covering damages you might cause to other people or their property. Liability insurance includes bodily injury if your truck injures another person, and property damage for damage you might cause to someone’s property.
- Uninsured motorist insurance. Covers your expenses if you are involved in an accident with a driver who doesn’t have insurance or sufficient insurance to cover the damages.
- Collision insurance. Covers damages to your truck from an accident.
- Comprehensive insurance. Protects your truck from damages caused by something other than a collision with another car, like fire, theft and vandalism.
- Medical payments insurance. Pays for your medical expenses and those of your passengers that result from an accident in your truck.
What additional coverage do I need?
For your towing company, you’ll find additional policies specifically tailored to your business needs, including:
- Garagekeepers insurance. Legal liability that covers your customers’ vehicles when they’re in your possession and parked at your shop or garage. If you only deliver towed cars to other businesses, with no possibility of storing vehicles at your own garage or shop, you might not need garagekeepers insurance.
- On-hook towing insurance. Covers your customers’ vehicles against collision, vandalism and more while you’re towing them.
- Wrongful repossession insurance. Professional liability that protects your company against negligence or failure to render your services during a repossession.
- Hired and non-owned auto insurance. Sometimes called “driveaway liability insurance,” protects your drivers from damages and injury when they’re driving a customer’s car.
Tow trucks used for repossession
If you own a business that’s involved in repossessions, you might have to jump through a few extra hoops for coverage. Because providers consider repossessions riskier than simple towing — with the possibility of wrongful repossession and driveaways — many of them rule out companies focused on repos only.
Others bar companies whose repos represent more than a specified share of their business. Big names like Progressive, for example, won’t insure commercial towing companies that generate more than 24% of their revenue from repossessions.
If your main business is repossession, look into insurers that specialize in repo insurance, like ATIG.
How can I save on tow truck insurance?
- Don’t skimp on coverage you might need. It could end up costing you more out of pocket in the long run if you’re not protected against all situations you might encounter in your business, especially if not being covered means paying out of pocket for expenses your company can’t afford.
- Hire and train safe drivers. Navigating the roads while towing often heavy loads requires skill. Make sure that your tow truck operators are experienced and have a proven history of safe driving.
- Establish safety policies at your business. Tow truck drivers who adhere to a high standard of safety are less likely to be involved in an accident.
- Shop around. Get multiple quotes and compare your options to find the best deal.
Why is insurance so expensive for tow trucks?
Insuring tow trucks is riskier than insuring other types of commercial vehicles. Some of the extra risks tow truck drivers face include:
- Being hit by other cars on the road
- Service during difficult weather
- Winching and loading problems
- Confrontations with owners during impound or repossession
What is a tow truck insurance filing and does my state require one?
A tow truck insurance filing is simply proof that your tow truck meets your state’s minimum insurance laws. In states that require insurance filings, your commercial insurance provider will file this proof on your behalf.
Only a small handful of states require a tow truck insurance filing, and each specifies what your filing should include:
- Colorado. Depending on your towing business, your insurance provider files Form 12 or Form 14 to prove you’ve purchased sufficient liability insurance and on-hook insurance.
- Montana. Your provider files Form MV5 COI, proving that you’ve purchased sufficient liability insurance, on-hook insurance and, if you tow vehicles to a storage or repair facility that you own, garagekeeper’s legal liability insurance.
- Oklahoma. To prove that you’ve purchased sufficient liability insurance, your commercial insurance company files the WA Form with the state.
- Texas. In the Lone Star State, your insurance provider files Form T, guaranteeing you’ve purchased sufficient liability insurance.
When selecting insurance for your tow truck, keep in mind your business and its needs. If your towing business involves high volume or specialized business like repossession, you might need to shop around for an insurer that specializes in your business activities.
Frequently asked questions about towing insurance
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