If you’ve got a tow truck business, your goal is probably to grow that business. That’s the name of the game, right? You want to have more tow trucks and more customers. Towing can be a very rewarding line of work. But when you’re growing a tow truck business, there are a few things you need to keep in mind.
6 tips for growing your tow truck business
1. Don’t grow your tow truck business too quickly.
When you’re trying to grow your towing business, you might be tempted to buy all the tow trucks. You want to tow more cars. But it’s maybe not the best plan to do that. What about insuring those trucks? If you grow too quickly, you may not be able to sustain that growth. As the old saying goes, slow and steady wins the race. Maybe try growing at a rate of one tow truck per year. That might be a healthier, more realistic way of growing your tow truck business.
2. Hire experienced drivers as you’re growing your tow truck business.
Another important thing you need to keep in mind is that you need to hire experienced drivers who have a record of driving safely. Use a pre-screening service to make sure that you’re hiring good drivers. (And remember, any driver you’re trying to hire should be happy for you to see their recent MVR.)
3. Try to stay claims free.
You should also do your best to stay claims-free. Keeping a clean loss record can help you get lower tow truck insurance rates because insurance carriers could see you as being less of a risk to insure (insurance companies are not big fans of risk.) Make safety a priority at your business and commit to managing your risks. So, make an effort to do what you can to prevent accidents and prevent claims by having safety at the forefront of your business.
4. Don’t try to go for the big contract right away.
A lot of towing businesses want to go for the big tow contracts right from the get-go when they first start out. They want to score a big contract or tow for a big-name motor club. The problem is that a lot of these big contracts are going to require a lot of insurance – they just are. They want all the towing businesses that partner with them to have really high limits of insurance.
But a lot of insurance can cost a lot of money. We don’t want to rain on anyone’s parade, but it’s the truth. Not to sound harsh or doom-and-gloom, but the price tag for the insurance required by a big contract might be more than your business can comfortably afford when you’re first starting out. We don’t mean to be, well, mean, and we’re not trying to make assumptions about your business’s finances. We’re just being real. (It’s expensive to run a tow truck business.)
A more practical plan may be to take some time to get on your feet and get off to a good start. Once you’ve been around a while and your business is established and stable, you can think about going after those contracts.
5. Pay your insurance bill on time.
Another important thing to note is that you really have to pay your insurance bill on time. This can help you keep your rates down – you can avoid a rate increase simply by making sure your payments get to the insurance company on time. If you have a track record of late payments, you could see way higher insurance rates at renewal time. (Plus, you don’t want to get canceled for nonpayment. That would be no fun at all.) Anyways, do yourself a favor and pay your bills on time. It’ll only help you going forward as you’re growing your tow truck business.
6. Remember, the goal is to stay in business and keep a clean loss history.
If you stay in business for a while and maintain a clean loss history, you’ll have more options for your insurance. You might find that you’re able to get rates that are lower. The thing is that tow truck insurance for new ventures can be tricky – there simply aren’t many markets for insurance for brand new towing businesses. But when you’re established and you’ve shown that you can keep a clean loss history, you’ll have a lot more options for your tow truck insurance – and you’ll have the opportunity to get lower rates.
It’s important to get the right tow truck insurance for your business, and our insurance professionals can help with that. Get started with tow truck insurance quotes by filling out our online form, giving us a call, or messaging us on LiveChat.