What Does Towing Business Insurance Cost on Average?

Tow truck companies offer a variety of services beyond the standard tow. For instance, they do roadside repairs if you have a flat tire or need a jumpstart. They also tow away vehicles that are illegally parked. Lastly, a tow truck can be sent to retrieve a vehicle if an automobile owner stops making payments on it. This task is often referred to as repossession work.

Whatever the case may be, the towing sector is exposed to a lot of risks. Therefore, business owners in the industry need to take the necessary precautions and insure their tow trucks. With the help of tow truck insurance, you can rest assured knowing your business is safeguarded. However, you can only reap the benefits if you understand what protection it provides and how rates are calculated.

In this article, we’ll discuss the average cost to insure your towing business, as well as the many factors that can affect your rates. Let’s get started!

Towing Business Insurance

The reality is that your insurance will take up a large portion of your company’s expenses. Towing business insurance exists to cover the unique exposures tow truck operators encounter daily. It’s important to note, not every business in this sector experiences the same level of risk. That’s why it’s important to customize an insurance policy that correlates with your business’s needs.

Since no two businesses are alike, this makes calculating the cost of tow truck insurance very difficult.

Average Costs of Towing Insurance

To insure one truck, you’re looking to spend anywhere between $2,000 and $15,000 a year. 

In 2020, statistics show that Progressive policyholders were paying around $450 a month for tow truck insurance. This averages out to about $5,400 a year. While this number rings in fairly low, it’s just the tip of the iceberg.

The reality is, many factors influence the cost of towing business insurance. For instance, the type of work you choose to forego greatly affects your premiums.

Average Premium Cost by Business Type

  • Standard towing/recovery: 4,500 dollars
  • Auto body shop: 7,500 dollars
  • Repossession: 10,000 dollars
  • Roadside assistance: 11,500 dollars (for information on roadside assistance business insurance)

As you can see, the greater the risk, the higher the rates. The best way to save on your tow truck insurance costs is by seeking assistance from an experienced agent. Preferably someone who understands the towing sector and the risks that follow.

At Tow Truck Insurance Rates we can get you competitive tow truck quotes in no time.

What Factors Affect the Cost of Towing Business Insurance?

There’s a multitude of factors that drive up the cost of insurance. We’ll discuss the most commonly reported ones below.


If you operate in a heavily congested metropolitan area you’re exposing yourself to greater risks. While you have the opportunity to generate higher profits in a busy city, you’re also increasing your chances of a collision.

Hours of Operation

If your towing business operates 24 hours a day then you can expect to pay higher rates. This is because longer business hours correlates with greater risk.


When it comes to hiring, a thorough driver screening process is essential. If you hire someone with speeding tickets or other driving violations you’ll see your rates go up. Therefore, only hire qualified drivers (having a CDL is a bonus) with experience and a clean driving record.

Safety Programs

A great way to save money is by implementing mandatory safety training for your drivers. Drivers who are more skilled and knowledgable will be less likely to take risks or act aggressively. As a result, you’d be less likely to file a claim in the eyes of an insurer.


The year, make, and model of your tow truck will greatly impact your rates. The newer the truck and nicer the model, the more you’ll end up paying. This is because higher end trucks cost more to replace and repair.

If you’re asking yourself how much does a tow truck cost then refer to our article for more information.




We can help you save on your tow truck insurance.