Guide to Understanding Tow Truck Insurance

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.

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

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.



We can help you save on your tow truck insurance.