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Buying Tow Truck Insurance for Your Company

by pradmin32 in Truck Insurance

Tow truck insurance is necessary for any business that tows vehicles. Even if it isn’t your core service, you need to protect yourself, your workers, and your assets in case of an accident.

Tow trucks are heavy and are usually carrying or dragging another vehicle with them. This creates a greater risk for incidents. It’s also risky for workers. Nonfatal injury rates were just above 204 per 10,000 full-time workers. That may not sound like a lot until you compare the stats to other professions. Other industries have a nonfatal injury rate of 98 per 10,000.

The death rates aren’t any better. A total of 191 towing employees were killed between 2011 and 2016, giving the industry an annual rate of 43 deaths per 100,000 fulltime workers. Other U.S. private industries combined had an annual death rate of 2.9 per 100,000.

Towing services are essential to communities. They keep roadways clear and help people get assistance after a breakdown or accident. While businesses and industry leaders try to find ways to improve safety measures, every company that tows vehicles must have adequate tow truck insurance.

Is Tow Truck Insurance Required?

Federal law states that tow truck drivers are required to have auto liability coverage. The minimum coverage limits will vary from state to state. You should check your local area or ask your insurer for more information. Some states also require medical payment coverage.

If you have employees, then you need a workers’ compensation policy along with your tow truck insurance. This will pay for medical expenses if an employee is hurt while on the job. It also protects your business from expensive lawsuits. Most states require workers’ compensation coverage for any company with one or more workers.

Types of Tow Truck Insurance

Multiple types of tow truck insurance are available. You may or may not need them all. It’s important to have a basic understanding of what each covers so you are aware of what might be required when you look into quotes. The types include:

  • Auto Liability – Auto liability will pay for property damage and physical injury if you are the at-fault driver. It will also pay for your legal fees if you are sued because of a tow truck accident.
  • Comprehensive – Comprehensive coverage will pay to replace or repair your tow truck after an incident that isn’t a collision. This policy is meant for incidents related to theft, animal damage, falling objects, or fire.
  • Collision – Collision insurance pays for tow truck repair or replacement after an accident.
  • Medical Payment – Medical payment insurance will cover medical expenses for you and any passengers that were involved in an accident. That includes customers who may be riding along while their vehicle is being towed.
  • On-Hook Insurance – On-hook insurance pays to replace or repair vehicles that are damaged while they are hooked to your tow truck. This type of coverage is called garagekeepers in Virginia and Texas.
  • Garagekeepers Legal Liability – Garagekeepers insurance pays for damage to a vehicle that’s being serviced or stored by your business. This coverage is called storage location insurance in Virginia and Texas.
  • Uninsured Motorist – Uninsured motorist coverage will pay for any injury caused by a driver who doesn’t have insurance or in hit-and-run situations.

Keep in mind that tow truck insurance doesn’t necessarily cover every expense after an incident. It does not pay for damages related to intentional harm and may not cover certain types of cargo like jewelry, money, alcohol, explosives, tobacco, and pharmaceutical drugs. Hazmat insurance is required if you are handling or working around hazardous materials.

How Much Does Tow Truck Insurance Cost?

The cost of tow truck insurance will vary depending on your business needs. The national average cost for basic coverage was $450 or $4,500 to $5,000 per year in 2020. That estimate was for one truck and basic roadside and recovery towing.

General liability policies for a small business with minimum coverage usually cost between $97 and $159 per month.

You will need to provide the specifics of your situation for an accurate quote. For example, a business that does auto repair and bodywork that operates a tow truck to support its repair business will pay an average of $7,500 per truck per year.

Companies that use tow trucks for repossession purposes should expect to pay around $10,000 per truck annually. That’s because repossession work comes with more risks than those who tow for a repair service.

Several factors affect your tow truck insurance premiums, including location, emergency hours, type of towing, number of drivers, company safety policies, length of time in business, and driving records.

How to Get a Tow Truck Insurance Quote

Getting a tow truck insurance quote is easy thanks to the internet. The fastest way to get a personalized estimate is to visit InsureTrucking.com. Click on the “Get a Quote Now” button to get started.

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Why Do You Need Tow Truck Insurance For Your Business?

by pradmin32 in Truck Insurance

Tow truck insurance is essential for anyone who owns and operates this kind of vehicle. Tow trucks are a necessary part of keeping our roadways clear and safe. They remove disabled vehicles, so they don’t remain obstacles for other drivers.

It isn’t an easy job and one that comes with risks. According to AAA, a tow truck driver is killed every six days. They are considered a type of emergency vehicle but aren’t always treated that way. This can put the truck and driver at risk while handling jobs on the road.

Starting a towing business takes a lot of money. A new tow truck costs between $50,000 and $100,000, with some models going much higher. Buying a towing license in most urban communities costs around $200,000. And then there are fuel costs, which have risen significantly this year.

Overhead expenses for things like power bills usually range between $5,000 and $7,000. And then there’s the cost of tow truck insurance.

Skipping the insurance may seem like a way to save money, but this can become a huge financial mistake. Even the safest driver can be in an accident. It’s impossible to know what will happen out on the road.

Tow trucks are very heavy, especially when they are loaded down with another vehicle. All that extra weight can lead to accidents if it isn’t properly secured and driven with safety in mind.

That’s just one more reason why you need to have tow truck insurance for your business.

What Kind of Companies Need Tow Truck Insurance?

If you describe yourself as a towing company, then you need tow truck insurance. Other related businesses may also need this type of coverage, including auto body shops and repair shops that need to move vehicles as well as roadside assistance companies and auction and salvage companies.

A good way to look at it is if your company offers towing, even if it isn’t your primary or most popular service, then you need to have coverage. A tow truck insurance company can review your information and suggest a policy that offers what you need.

What Kind of Tow Truck Insurance Do I Need?

As mentioned above, it is usually best to find a reliable tow truck insurance provider and talk to them about your specific needs. Different policies will provide different levels of protection. For example, if you own your company, then you may need a business owner’s policy.  This includes basic coverage for just about everything.

A business owner’s policy should include property insurance for office equipment, supplies, and buildings. It should also have business interruption coverage that pays out if your business is damaged in a way that requires you to pause operations. 

Basic liability is also a good choice, although tow truck businesses may want to pay for additional coverage like insurance for medical payments, garage service, physical damage, and tow truck liability.

On-hook tow truck insurance is important as well. This coverage will pay to repair or replace vehicles that are damaged while towing. This is for vehicles that you don’t own and will pay out if the car or truck is damaged due to explosion, fire, theft, vandalism, or collision.

Towing companies also need to have Workers’ Compensation insurance. This coverage pays if an employee becomes ill, injured, or is killed while on the job. Tow truck drivers have a high-risk profession that they must do in all weather conditions. 

The Bureau of Labor Statistics reported that accidents are the leading cause of death for tow truck drivers. Experts estimate a rate of over 40 deaths per 100,000 workers. That is very high when you consider that other industries are usually around 3 deaths per 100,000 workers.

Having enough coverage to protect them and their families in case of an accident is a necessity. Make sure you have adequate insurance for your employees.

What Is Not Covered by Tow Truck Insurance?

It is important to understand the fine print when buying tow truck insurance. Some companies will only cover a manufactured tow truck and not a modified vehicle. Some companies use pickup trucks that have a hook welded on. These vehicles may be ineligible for coverage while others may be eligible but at a higher rate.

Also, keep in mind that on-hook tow truck insurance doesn’t cover damage to vehicles you or your business owns or any vehicles that are not hooked to your tow truck. It also won’t pay for personal injuries sustained by two truck drivers and passengers.

If you plan to store vehicles for customers, then also keep in mind that on-hook only pays when damage happens during towing. If you are storing vehicles, you need a garagekeepers policy. This provides coverage in case damage happens while someone else’s vehicle is stored on your property.

There is sometimes a little confusion because insurance companies in Texas and Virginia use the name “garagekeeper’s insurance” to describe on-hook coverage. If you operate in either of these states, then you need to also ask for “storage location insurance.”

Where Can I Get Low Rates on Tow Truck Insurance?

Finding low rates on tow truck insurance is easy. Just visit InsureTrucking.com and click the “Get a Quote Now” button. You can also contact us at 866-307-5480 with questions or to learn more about our insurance rates and coverage options.

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