Tow truck insurance can get confusing sometimes. There are a lot of different things to take into account when it comes to your rates, but we’ve put together ten things you need to know about tow truck insurance that will take away some of the “Why?” about your rates.
1. Rates vary greatly depending on what you do.
You might do roadside assistance. You might have a body shop with a couple wreckers that you use to save the day. You might have an operation that’s entirely towing. You might do repo. The type of business you have will impact the rates because your risk is different and you’ll need different types of insurance (See #2.)
2. There are many different types of commercial auto insurance that make up your “tow truck insurance plan.”
There are lots of different coverages out there that all do different things. Since each tow truck business is different, each one will need different types and different levels of insurance. Some of the coverages you might consider are…
- Auto liability
- Physical damage
- Garage liability
- Wrongful repo
Each of these coverages does different things. Your business might not need all of them, depending on what you do. And each of these types of coverage comes with different levels of coverage that you can choose from, which can also have an impact on your rates.
3. Your location and towing radius have an impact on your rates.
Towing businesses based in more rural areas will most likely pay less for their insurance than towing businesses based in the city or a metro area. That’s because there’s more risk in the city. Whether or not you cross state lines is also a factor in determining your rates.
4. Filing minor claims can make your rates go up.
Even if a claim is relatively small, it can make your rates go up. Any claim or loss makes the insurance company see you as being more of a risk, so they’ll probably want to raise your rates. That’s why you should always talk to your agent before filing a claim. Make sure that the damage or situation is worthy of filing a claim instead of handling it on your own.
5. Doing repo increases your rates.
Repossession is a dangerous game to be in. There are angry people who might hurt drivers, the chance of repo-ing the wrong car, and the need to work fast. Insurance companies see repo as being very risky, so the rates for repo operations are higher than for businesses that do strictly towing.
6. Safety features can help you save on your insurance.
Putting an emphasis on safety at your business can help you save on your insurance rates. Some safety features you might consider are…
- Installing GPS units in your trucks to monitor speed.
- Having safety meetings.
- Having safety policies.
- Having an employee handbook/safety manual.
- Doing driver training.
Insurance companies like to see that you’re taking the time to make safety a priority. The safer your business is, the less chance you’ll have a claim.
7. The heavier the truck, the more it could cost to insure.
Heavier vehicles can do more damage than lighter ones. The heftier your tow truck, the higher the insurance rate could be.
8. The MVRs of your drivers could raise your rates.
If your drivers have poor MVRs, or Motor Vehicle Records, that can really hurt your insurance rates. A poor MVR means that the driver has accidents or tickets on their record. Insurance companies don’t like risk, and they see accidents and tickets as signs of risk.
9. Even if you don’t have a garage you need to consider garage liability insurance.
Garage liability can help cover claims of bodily injury or property damage that result from the services your business provides – for example, if you change someone’s tire and then the tire comes off a mile down the road, causing an accident.
10. Tow truck rates have been increasing.
You’ve probably noticed that tow truck insurance rates have been going up lately. That’s because carriers have decided that towing is too risky of a business to insure. They’ve been pulling out of the game, which leaves fewer options for tow truck businesses. That means higher prices.
As you can see, there are a lot of factors that go into determining your tow truck insurance rates. We can help you save money on your tow truck insurance, and we’ll get you three free quotes. We’ll take the time to get to know you and your business so that we can help you build a customized insurance plan to protect you from all your risks. Just fill out our quote form or give us a call today.