Tow Truck Business Insurance: Everything You Need to Know

Tow truck insurance was designed to cover the wide breadth of business risks that towing operations face every day.

A towing company is a business that offers services and roadside repair or assistance for disabled vehicles. This may include repossessions, police or state authority work, and roadside assistance.

Tow truck insurance can also cover vehicles in your possession in a parking lot or facility you own or rent.

There is a basket of insurance coverages that towing companies will need to properly protect their business.

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Tow Truck Insurance

A tow truck business earns income by towing disabled vehicles, as well as possibly roadside assistance services and storing disabled vehicles in facilities or parking lots they own or rent.

If that’s what you do, you will need a customized tow truck insurance program.

Here are a few examples of types of towing operations and related businesses that might need commercial tow truck insurance include:

  • Roadside service providers
  • Auto club contractors
  • Rotational towing
  • Auto body shops
  • Auto mechanical repair
  • Full service stations
  • Auto salvage and auction haulers

Tow truck insurance covers the unique set of exposures that are specific to towing operations, it’s vital that you have coverage adjusted specifically for your needs.

Towing Operations and storage protection

Towing insurance can cover more than your typical wrecker or rollback truck.

Tow truck companies often carry the following insurance coverages as well:

  • Garagekeepers Legal Liability insurance – Protects your customers’ vehicles when they’re parked on your property.
  • On-Hook Towing insurance – Protects your customers’ vehicles while you’re towing them.
  • General Liability insurance – Pays if you’re legally liable for bodily injury, property damage or personal injury that isn’t directly related to your covered vehicles.

The major issue you’re protecting against when storing vehicles is Care, Custody, and Control. When other people’s property is in your care, custody, and control you have certain unique obligations to that property that must be protected.

Tow truck insurance coverages

Here is a list of tow truck insurance coverages that you’ll want to consider for your towing operation:

Liability insurance — This pays for an injury that you cause to other people and damage to their property. It includes two coverages for 3rd parties: Bodily injury liability, property damage liability Coverage

Medical Payments Insurance — Pays for medical bills for you and the passengers in your vehicle in case they’re hurt in an accident or auto-related injury.

Physical Damage Coverage — Pays for repairs to your vehicle caused by an accident like a collision with another vehicle or a falling tree branch.

Uninsured Motorist Insurance — Pays for injury to you and your passengers caused by drivers who don’t have insurance or adequate coverage. It also protects you in case of a hit-and-run. Uninsured motorist insurance for commercial tow trucks can include:

How much Does tow truck insurance Cost?

In 2020, the US national average monthly cost for tow truck insurance through Progressive Insurance was $448. While this is a good stat to know, it is just a barometer for what you might pay.

The cost of tow truck insurance can vary widely from company to company and insurance carrier to insurance carrier.

There are many factors that influence the cost of tow truck insurance including your location, type of towing and driving history.

New data suggests new annual policies with both primary liability and physical damage coverages and a clean driving record for all drivers could pay substantially less than the price quoted above.

Whether you’re seeking cheap tow insurance or you need specialized coverage, one of our Rogue Risk licensed insurance advisors can give you a customized quote that fits your particular situation.

While rates are determined on a state-to-state basis and depend upon your specific location, at Rogue Risk we understand the unique nuances affecting tow truck companies, including: 

  • How many tow trucks do you own? What type?: This can include light single axle, medium and/or heavy-duty dual/triple axle, underlift wreckers, rollback carriers, and other types.
  • Type of services you provide: Do you offer roadside assistance, auto-repair, repossession, salvage, impound, rotation, etc.?
  • Hours of operation: Do you provide 24-hour service or close at the end of a business day?
  • What you tow: Do you tow vehicles only? Or do you include vehicles, motor homes & RVs, motorcycles, boats, trailers, or heavy equipment?
  • Safety Program: Have you implemented safety programs (which are usually required by state and federal law for you and your employees)?
  • Driver Qualification Files: Required by state and federal safety carrier regulations.
  • Loss Run History: Usually three to five years worth is considered into calculations.

The Rub

If you own a towing business—or offer towing services—Tow Truck Insurance is essential business insurance if you care about the long-term sustainability and profitability of your business.

Purchasing tow truck insurance is absolutely NOT something you want to do on your own. Towing is a unique business, with unique risks, that require a unique set of insurance coverages.

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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