What kind of business you are.

Coverage will vary based on what your business does. Some questions to think about are:

· Do you currently have a contract with a county, state, or insurance company?
· What kind of trucks do you use?
· Do you haul salvage materials?
· Do you haul new and used cars, or only disabled vehicles?
· Do you do repossessions?

The answers to these questions will help you and your agent establish just what kind of business you have and what kind of coverage is appropriate for you. It’s important that you and your agent both know exactly what you want your operation to achieve.

Where you’re based.

The location in which you work makes a difference. The size of the radius in which you operate could also play into your rates.

If your company does repossessions.

Finding insurance for tow trucks can be tricky. Lots of carriers have decided to back away from covering tow trucks due to the high risk associated with the industry. What can make finding coverage even harder is if your tow truck company does repossession work. Many insurance carriers view the risk that goes along with repo work to be too high.

What kind of trucks you have.

The type of trucks at your command is another thing that impacts your coverage. For example, insuring a wrecker is different than insuring a flatbed. The larger the truck, the larger the premium—the logic makes sense on this one. Aside from that, the age and model of your vehicles are also important to your insurance agent.

What you’re hauling.

Your insurance carrier will also look at what you’re hauling. Are you transporting new or used cars? Disabled cars? Salvage materials? Your carrier will most likely recommend on-hook coverage, which protects you if something were to happen to a client’s car while it’s being towed by your truck. The minimum required on-hook coverage is usually $50,000 – $100,000.

Your drivers.

Your insurance company is looking at potential risks. The longer your drivers have been doing what they do, the lower the risk. Your insurance carrier will also want to know about the safety records of your drivers. Are their Motor Vehicle Records (MVR) clean? Safety is a huge concern, and for good reason. Distracted driving, speeding, and unsafe driving habits are all major risks, so it’s important to make safety a priority by taking measures to implement good driving habits. Some things that companies can do to increase safety are to have monthly meetings, conduct weekly check-ins with drivers, and install GPS devices that detect speed in the trucks.

How long your business has been around.

This is along the same lines as evaluating your drivers. The longer your company has been in business, the more history is available for your insurance company to review. Many carriers are hesitant to write companies that have been around for less than two years. However, newer companies can benefit from having clean loss histories. We’ll talk more about loss histories in a bit.

If clients’ cars are kept on your premises.

Sometimes you might be required to keep a customer’s car at your shop. However, this creates an additional risk. To make sure that you’re covered if anything were to happen to your client’s car while it’s in your care, your carrier might recommend garagekeeper's coverage. Garagekeepers coverage protects you if something were to happen to a client’s car while it’s on your property.

For example, it would cover you if someone were to break into your shop and damage or otherwise vandalize a client’s car. Since your customer most likely wouldn’t be very happy if a mischief-maker spray-painted their car while it’s in your shop, it’s best to be sure you’re protected.

Loss histories.

A loss-run history shows a list or record of all claims made on your commercial policy. Your loss history will affect your rates and the carriers willing to write for your company. Even your current carrier can decide not to renew your policy. Some basic information that a loss-run will show are:

• Company name
• Policy number
• Date of the claims and if they’re still open
• The expense paid
• An explanation of the claim

Keep in mind that if you’ve changed insurance carriers, you’ll need to produce loss-runs from each carrier you’ve used when seeking new insurance coverage.