What is on-hook coverage and does my tow truck business need it?

Looking after other people’s stuff is stressful. There’s a lot of responsibility associated with cars in particular, and since you’re in the towing world you’re pretty much cars all day, every day. Your customers trust you to look after their vehicles, vehicles that may very well be one of the largest investments they’ve made. No pressure, right? Since your customers probably don’t want you to return their car to them in worse condition than they gave it to you, you need insurance to protect your business. Specifically, you need on-hook coverage.

Note: If you’re from Virginia or Texas, you’d know on-hook coverage as garagekeepers insurance.

What is on-hook coverage?

On-hook coverage can protect your customer’s car while it’s attached to your tow truck. The roads are a dangerous place, and you never know what could happen while you’re taking a disabled car from Point A to Point B. Tow truck and wrecker companies need on-hook coverage because the physical damage coverage covering the tow truck itself does not extend to the car being towed. That’s why it’s so important to have on-hook coverage. As you can see, the client’s car attached to the tow truck represents a huge opportunity for loss, and that risk has to be covered. Basically, on-hook coverage protects your business when you’re towing a car – it can help you cover the costs of replacing or repairing the vehicle should a covered loss happen.

When would on-hook coverage kick in?

Okay, let’s go through a couple different scenarios to illustrate when on-hook coverage could help your business out of a tight spot.

Exhibit A.

A tow truck driver gets a call to pick up a car – a nice car – that’s broken down and won’t work. The owner of the very nice car is very happy to see them when they arrive. The driver hooks the car up to the tow truck and sets off on their merry way. Now. Let’s say that, on their way to the mechanic’s shop where the car needs to go, the driver gets distracted by an accident on the other side of the street. They get into an accident of their own. Fortunately, the tow truck driver is fine. They know why it’s important to wear a seatbelt, so they were securely buckled up. However, the client’s car now resembles a crunched-up metal pancake. Not good. Better fall back on your on-hook coverage.

We can help you get the on-hook insurance you need.

We can help you save on your tow truck insurance.

Exhibit B.

Your tow truck driver gets a call about a broken-down vehicle and drives out to the scene. They take their trusty rollback. Everything’s great – they attach the car, get everything set, and drive away. They get to the mechanic’s shop that the car needs to go to. They attempt to unload the car from the rollback…except that the car has a different idea. The car rolls backward and smashes into a telephone pole. The telephone pole definitely comes off the better for the accident. The car’s fine, really, except for the smashed-in back end. But hey, on-hook coverage could take care of that, too.

How much does on-hook coverage cost?

Well, that’s a great question. The cost of tow truck insurance depends on a lot of factors, and on-hook insurance is no exception. The insurance company will be looking at some of the following things when they’re getting you an on-hook insurance quote…

  • What kind of cars you tow (new, used, etc.)
  • Your tow radius
  • Make, model, year of your tow trucks
  • How many trucks are in your fleet
  • Your loss runs (a record of your business’s losses and claims)
  • Your drivers

These are just a few things an insurance company might evaluate when deciding whether or not to insure your business and how much to charge you for that insurance. Of course, the amount of on-hook insurance you need also plays a large part in determining how much on-hook coverage costs. If you tend to tow more expensive cars, your insurance will probably cost more. At any rate, the best way to get an accurate idea of how much it will cost is to get multiple tow truck insurance quotes.

There may actually be a required limit of on-hook coverage that you need to carry. That means that you need at least that much on-hook insurance to operate your business. The requirement varies by state, so make sure that you check what it is in your state so you can be sure to stay within the bounds of the law.

How to save money on on-hook insurance.

Basically, keeping a clean loss record is a great way to lower your tow truck insurance rates all around, so it’s important to figure out how you can improve safety at your wrecker business. Avoiding claims and losses is always a good idea.

We can help you save on your tow truck insurance.

Aside from that, shopping around is another great way to try to score some savings on your on-hook insurance. Our team of tow truck insurance professionals can help you save money on your wrecker insurance by shopping around for rates. We know that the tow truck insurance game hasn’t been easy lately, but we’re committed to helping businesses just like yours save money on your insurance. All you need to go to get tow truck insurance quotes is fill out our quote form or give us a call today.

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