On Hook Towing Insurance: The Basics

If you own a towing operation or do incidental towing through a service station or an autobody shop, then you’ve most likely heard of on-hook towing insurance.

NOTE: On-Hook Towing insurance will pay to repair or replace a vehicle you don’t own if it is damaged by a collision, fire, theft, explosion, or vandalism while you are towing or hauling another vehicle.

In Texas and Virginia, On-Hook Towing insurance is called Garage Keeper’s Legal Liability insurance. In these two states only, what is actually Garagekeepers Legal Liability insurance is called Storage Location insurance.

On-Hook insurance is an extremely important part of your Tow Truck Insurance program.

Today we’re going to explain exactly what you need to know about On-Hook Towing Insurance…

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On-Hook towing Insurance

The fun part about on-hook towing insurances is that the name essentially explains exactly what the insurance is covering.

When you as a towing operation, pick up a vehicle and that vehicle is in your care, custody, and control while attached to your vehicle; be it either on a flatbed or on an actual hook, there is no coverage under a commercial auto policy or a standard business owner’s policy.

This means you have a major risk exposure for your towing operation, auto body shop, or service station, unless you have the on-hook towing insurance endorsement.

Now most times, this coverage will be included in a tow truck insurance package. So if you have a package for one of the types of businesses that I just described above, then it is very likely that on-hook towing insurance has been added.

The on-hook coverage will have a sub-limit most likely, which means that say the standard general liability limit on your policy is $1,000,000, the on-hook coverage portion is going to have a sub-limit of $15,000, $25,000, or even $50,000.

The amount depends on how big the vehicles are that you’re towing. If you’re often doing big rig towing, long haul trucks, Mack trucks, if you’re doing school buses, anything like that, you may want to have a larger sub-limit.

If you’re mostly just doing personal autos and trucks, then maybe a lower sub-limit for you on-hook insurance coverage will work just fine.

On-Hook Insurance Example

Here is an example of how on-hook tow insurance works: let’s say someone gets a flat in a parking lot.

You go, you pick them up, you hook them up to your vehicle, and as you’re pulling away, you cut a turn a little too close and a tree branch rakes down the side of the vehicle and puts a big scratch all the way down the side of the vehicle.

Ouch.

Now the customer is pissed because they hired you to come pick up their truck and fix their flat or whatever, and now they have this huge gash down the side of the vehicle, that is NOT going to be covered unless you have on-hook towing insurance.

The Rub

As I said, on-hook insurance is often included in a package policy for service stations, auto body shops, and towing operations.

If it’s not, you can also look to get coverage standalone, but it should be included as part of the package.

Either way, let our team here at Rogue Risk verify your current coverage or if you don’t have insurance yet, let us get you set up the right way from the beginning.

If this is the kind of relationship that you would like with your insurance provider, we would love to talk to you.

I look forward to introducing you to a new way of viewing your insurance program.

Thank you,

Ryan Hanley

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