If you are a tow truck and wrecker business, you know exactly what we are talking about when we say that tow truck insurance rates have gone up a lot. It’s getting harder and harder for small tow truck companies to keep their doors open with rising commercial auto insurance rates.
What happened and why have tow truck premiums gone up overnight?
It all started with Progressive Insurance leaving the market. Then things got really ugly in the world of tow truck insurance.
Soon, Atlantic Specialty, Merkel, and others began to pull out. Today, only a precious few carriers will write coverage for tow truck operators. And they know it, so the prices have gone sky high. That means tow truck business owners got the short end of the stick.
Why did this happen to begin with?
Many of you share that you’re angry at the insurance companies and that’s certainly understandable.
However, we don’t have to tell you how dangerous your line of business is. Dozens of good men and women die every year while working on the US state highways. Many annually take the trek to the International Tow Truck Wall of The Fallen in Chattanooga, Texas to show their support to the families of the fallen. Speeding cars with distracted drivers are the culprit. Many drivers disregard the “Slow Down Move Over” law. Others ignore the no texting laws in their state.
And then there are traffic accidents. Just suppose one of your drivers is distracted and hits another car from behind. Since your trucks are so expensive, it can easily cost the insurance company $25,000 to $30,000 to repair your vehicle. This doesn’t even take into account the costs to repair the other driver’s car. Add on top of that the ever increasing medical and hospital costs that come with car wrecks.
Now, when you combine these things with the danger of furious car owners that take their anger out violently on tow truck drivers that repossess their cars…it creates the perfect storm for the industry. There’s just so much risk that tow truck drivers face while trying to do their jobs. That means higher premiums.
What you can expect moving forward in the industry.
Industry-wide commercial auto underwriting losses that have happened over the past few years explain why only a few select carriers are still willing to play ball.
Experts say that a smaller pool of insurance carriers means a “Hard Market” for tow truck insurance. That means…
- Higher premiums
- Rising deductibles
- Stricter guidelines to follow
- Reduced coverage for your business
- A risk management plan requirement
How will this affect your tow truck business?
Unfortunately, many small companies have no choice but to retire tow trucks. Others are declaring bankruptcy and closing their doors. Jeff of South Side Wreckers tells us that many tow trucks are so expensive that insurance carriers will not cover them. Many Atlanta tow truck owners are seeing renewal premium increases anywhere from 50-150%. He knows of one company that has had to take three trucks off the road. He knows another local company that recently had to close its doors because they couldn’t afford the rates.
This means that tow truck businesses will have to pair up with a tow truck insurance expert to survive and thrive in this environment. You want ot work with an insurance specialist who understands the frustrations of the tow truck industry. You should also look for one that’s willing to think outside the box to find a solution that will work for you.
The key to saving on your tow truck insurance.
The good news is that Progressive isn’t the only insurance company in the market. There are other options for the tow truck industry. However, everyone needs to do their part. What can you do?
It comes down to two things. First, you must be willing to team up with a specialist that will help you to adjust to the changing marketplace. So, take the time to interview insurance agents. Don’t settle just for a couple of quotes. Talk to them and listen to your gut instinct.
Second, you have to be proactive. The old football saying applies here: the best offense is a good defense. That means looking for ways to reduce risks and prevent claims. This means taking the time to build a risk management plan. For example, when we interviewed Jeff he told us that his business has hired a risk management company. Have you thought of doing that yet?
Reach out to your tow truck insurance agent on things that you can do right now to reduce your company’s risk. This website is devoted to sharing helpful tips and suggestions to help you with this very thing.
We can help you save on your tow truck insurance rates by getting you three free quotes. All you have to do is fill out our quote form or give us a call today!