Considering starting a towing company? Are you already operating a towing business and need options regarding tow truck insurance?
Whatever the situation is, there’s a ton of information owners of tow truck businesses need to know regarding insuring their trucks. In fact, it’s crucial to understand the risks associated with this lucrative business. Note that tow truck insurance is a specialized coverage. Therefore, not as many people will be familiar with it compared to a basic commercial insurance. You can only leverage the benefits if you know what protection it provides and how rates are determined.
Don’t worry if insurance confuses you, here’s a guide to understanding tow truck insurance.

2025 Regulations & Insurance Minimums
In 2025, tow truck operators must pay close attention to updated regulations and financial responsibility rules. If your truck has a gross vehicle weight rating over 10,000 pounds or crosses state lines, FMCSA requires minimum financial responsibility coverage under 49 CFR Part 387.9. FMCSA official guidance offers current thresholds you should review.
State laws also vary. Some require specific liability minimums even for private tow operations. Check your state’s department of insurance or state DOT website to confirm current minimum liability levels.
Types of Insurance Coverage for Tow Trucks
These are different types of insurance coverage you can opt for:
- Liability: if property is damaged or bodily injury occurs due to an accident.
- Comprehensive: if your truck gets damaged from something other than an accident.
- Medical Payments: this will cover the medical costs of your truck driver and their passenger if there’s an accident.
- Garage Service: if you own a garage, this will protect you in case a vehicle gets damaged during service.
- Physical Damage: covers damages to your truck no matter who’s at fault.
- On-Hook: if a customer’s vehicle is damaged during towing.
- Underinsured or Uninsured Motorist: if the at-fault driver doesn’t have proper coverage or no coverage.
Businesses That Require Tow Truck Insurance
All businesses that tow vehicles need proper insurance coverage. Such businesses include:
- Auto repair centers
- Police departments
- Auto body shops
- Repo businesses
- Used car lots
Emerging Risk Factors in 2025
Several risk factors are raising tow truck insurance costs:
- Repair and parts inflation: replacement parts, labor costs, and supply delays amplify repair expenses.
- Telematics & data: use of GPS, camera systems, and driver scoring leads insurers to reward safer fleets but also capture more data.
- Uninsured/underinsured motorist claims rising due to overall vehicle insurance gaps.
- Environmental risks: damage from severe weather events, flooding, or natural disasters are being viewed more seriously by underwriters.

What Factors Impact Tow Truck Premiums
There are plenty of factors that may impact the premium insurers charge. Moreover, chosen coverage, previous claims, limits selected, and several other factors can affect the cost.
Other factors include:
- Make, year, and model of the tow truck
- The types of roads the operator drives on
- Driving record
- Experience of hired drivers
Of course there are several ways you can save on your premium. You can earn discounts based on driving records, safety programs, and other factors.
Make sure you compare different tow truck policies and independent insurance agents to save big. Shop around till you find the best rates and coverage.
How Will Insurance Protect You?
Keep in mind that tow truck insurance offers a variety of protection. You may find that many protections are similar to standard commercial policies. It may include coverage for medical payments, physical damage, and uninsured motorists.
It further includes garage keeper liability coverage that protects vehicles you service at your shop. If your towing company doesn’t store vehicles, it doesn’t need this coverage. It also includes on-hook coverage that protects you if a customer’s vehicle gets damaged while towing.

Summing Up
With various insurance coverages available, it’s often daunting for businesses to find the best insurance plan that works for them. If you don’t know where to start, reach out to one of our agents who specializes in your industry.
FAQ: Tow Truck Insurance in 2025
1. What’s the minimum liability coverage I need?
If your truck weighs over 10,000 lbs and you cross state lines, you likely need at least $750,000 in liability coverage.
2. Why are premiums higher now?
Rising repair costs, supply chain delays, and inflation are pushing premiums up across the board.
3. Can telematics help lower my rates?
Yes. Dash cams, GPS, and driver scorecards can lead to discounts by reducing risk.
4. Do insurance requirements vary by state?
They do. State rules can differ from federal guidelines, especially for “not for hire” or intrastate trucks.
5. What if I get hit by an uninsured driver?
Without uninsured motorist coverage, you may pay repair costs out of pocket. This protection is optional but highly recommended.








