Tow truck insurance coverage might seem quite overwhelming and a little scary. There are a lot of insurance vocab words that are important to know, and of course, there are all the tow truck insurance coverages to consider, too. So, yes, there’s a lot to remember and a lot to absorb. We’re going to explain three different “insurance” numbers that you ought to keep an eye on when it comes to insurance, though it might be tempting to get your insurance policy and then forget about it. So, here we go – we’ll explain what a deductible is, what a premium is, and what a limit of coverage is.
What is a deductible?
Okay, here’s the thing:
When you have a claim, you might be responsible for paying part of it. Your deductible is the portion of the claim that you have to pay. (Think of it this way – you have your chunk of the claim and the insurance company has the rest.) If it makes you feel any better, chances are the insurance company’s part is going to be a lot more expensive than yours.
We’ll illustrate with an example.
Let’s say you’re driving your tow truck when you accidentally take a turn too fast and skid off the road and into a tree. Fortunately, you’re fine – that’s the most important thing. But your tow truck needs some serious repairs. If you have collision coverage, this kind of claim should be covered, but you might have a deductible to pay. If the claim ended up being $7,000 and you have a deductible of $1,000, your insurance company would pay $6,000 and you would pay $1,000.
Your deductible can affect your tow truck insurance rates. If you take a higher deductible, you could see lower insurance premiums because you’re less likely to file small claims. If you have a lower deductible, you could have higher rates. Of course, you don’t want to set your deductible so high that it would be impossible to pay – you have to find the balance.
What is a premium?
Your premium is essentially the rate that you pay for your insurance. (So it’s probably the number you’re most concerned about when it comes to getting insurance for your tow truck business!)
Now, your next question might be this: how much is tow truck insurance coverage? Tow truck insurance premiums depend on many different factors, including the following:
- Your location
- Your tow truck
- Your loss history/claims
- Your drivers and their MVRs
- Your tow radius
- How many tow trucks you have
- Speeding tickets/Traffic violations
- How long you’ve been in business
- What kind of car you haul/What kind of towing you do
Insurance companies look at these details about your business when they’re setting your rates because they give them an idea of how risky your business is to insure. To get an accurate idea of what your premium will be, it’s best to get tow truck insurance quotes so you can compare coverages and rates. (To get started with tow truck insurance quotes, fill out our online quote form or give us a call today.)
What is a limit of coverage?
Your limit of coverage is, to put it simply, how much insurance you’ve bought. It’s the maximum amount of insurance that can be paid for a covered loss. (A covered loss is a loss that your insurance policy will protect you from.) Your insurance won’t exceed the limit of coverage, which is why it’s so important to make sure that you have enough insurance to fully protect yourself against a variety of losses.
When you’re getting tow truck insurance coverage, it’s important to think about how much coverage you need – and which coverages you need. Without high enough limits of tow truck insurance, you could be left to cover expenses out of your own pocket. (This is why you might not want to just get the minimum amount of insurance required by law – you might want to get higher limits.)
So, those are three tow truck insurance coverage numbers that you need to pay attention to. It’s important that you choose the deductible that’s right for your business and your financial situation and that you have enough insurance to truly protect your business. It’s also important to make an effort to emphasize safety at your business so that you can manage your tow truck insurance premium. Anyways, that’s deductible, premium, and limit defined.
We can help you get tow truck insurance quotes for your business. It’s important to compare coverages and pricing when you’re getting tow truck insurance. Get started with your quotes by filling out our online form. Or, if you prefer, just give us a call – we’re here to help.