The world of tow truck insurance can be a little complicated and overwhelming. There are a lot of coverages to know about. So, how can you get to be a pro at tow truck insurance? What are some things you need to know about towing insurance? Well, here are a few things that tow truck insurance agents want you to know about it.
10 things tow truck insurance agents want you to know.
1. Check your limits.
Tow truck insurance agents want you to know that you should be aware of your limits of coverage. It’s really important that you have enough coverage to truly protect your business. Yes, it might seem like the price of getting more insurance is high, but remember that tow truck insurance is what can help you get your business back on its feet after something happens.
Anyways – the point is that you need to make sure you have the right level of coverage. Bare minimum levels of coverage probably aren’t the best idea.
2. Know what physical damage coverage is.
A common misunderstanding about insurance is that auto liability covers the business’s tow trucks. The truth is that a tow truck business would need physical damage insurance to protect the tow trucks themselves. Auto liability takes care of the other driver’s medical bills, car repairs, and so on if there’s an accident where the tow truck driver is at fault.
However, physical damage coverage (consisting of collision and comprehensive coverage) can protect the trucks. Collision coverage can help if the tow truck is damaged in a wreck, and comprehensive coverage can help cover repairs of the tow truck if it’s damaged by something other than an accident (for example, theft, fire, falling objects, vandalism, and animal strikes).
3. Understand that A LOT of factors can affect your rates.
Tow truck insurance agents also want towing businesses to know that your insurance rates depend on a lot of factors. Your rates aren’t going to look another business’s, and even if you ask your towing buddies what they pay, you’re probably not going to have the same rate – even if your businesses are similar.
For example, the following can affect your rates:
- Your loss history
- Your location
- Speeding tickets
- Your drivers
- The tow truck itself
- Your tow radius
- What kind of work you do
4. Tow truck insurance rates have been going up.
The thing about towing insurance is that rates have been going up. You need to be prepared for that and understand that it’s a tough market out there. To manage your insurance expenses, make sure to mitigate your risk by committing to safety. Keeping a clean loss record can help you get lower rates because you’re a better risk to insure.
5. Take your time to grow your business.
If you’re trying to grow your business, take your time. Yes, you might want to buy all the tow trucks and keep adding to your fleet. But if you grow your business too fast, you might end up succumbing to growing pains. Rather than getting all the tow trucks, grow your business slow and do your best to keep a clean loss record as you get started. This can help your insurance situation in the long run.
6. Commit to safety.
We mentioned this briefly before, but something else tow truck insurance agents want tow businesses to know is that it’s important to commit to safety. You’ve got to make sure you hire drivers who will be responsible and drive safety. Keep in mind that a clean loss record can help you get better insurance rates. Show that you can run a safe operation – insurance companies don’t really like risk, so if you mitigate your risks, you’ll make a better case for yourself when you’re getting coverage.
7. Have a business plan.
You need to have a plan for your business. You can’t run a successful business without knowing how it’s going to function and actually work. Your tow truck insurance agent is going to want to your business to thrive, and having a comprehensive business plan can help you get off to a great start.
8. On-hook coverage is important.
Another coverage thing tow truck insurance agents want you to know is that on-hook coverage can help cover the client’s car while you’re towing it. To give an example, what if you’re hauling your client’s car when you accidentally get into a wreck? The client’s car could be toast, but on-hook coverage could be there to save the day.
9. You might need garage liability even if you don’t have a garage.
This is something tow truck insurance agents explain a lot. Garage liability can protect your business by covering claims of bodily injury or property damage that arise because of the services your business provides. You don’t need a garage to have garage liability insurance. For example, what if you’re doing roadside assistance? You change someone’s tire on the side of the road, but the driver only makes it a little way down the road before the tire pops off. That’s where garage liability can be a big help.
10. Repo can raise your rates.
There are a lot of risks that come along with doing repo, so you could see higher insurance rates if you do repossessions. It’s something to keep in mind if you do repossessions as part of your towing operations.
The world of tow truck insurance is complicated, and hopefully, these tips will help as you get through the insurance process. Our team is ready to help you get the insurance you need to protect your business. Get started with your quotes by filling out our online form, giving us a call, or messaging us on LiveChat.
