If you own a tow truck, then you need to have tow truck insurance. These vehicles are essential to keep traffic moving. If a car becomes disabled or is damaged in an accident, we rely on tow trucks to help clear the way. Vehicle owners also count on towing companies to provide services when a car or truck becomes disabled and needs to be taken to a garage.
This type of work puts tow truck drivers at a higher risk for accidents and damages. On top of operating a heavier vehicle, they are also responsible for safely transporting another person’s property.
Tow trucks have characteristics that make them more vulnerable to certain types of accidents. Hook and chain tow trucks are less common now but are out there. Using this method on an all or four-wheel drive vehicle can damage the drivetrain. Lifting the front end of a vehicle puts more pressure on the back end, increasing the chances of damage.
Wheel lift tow trucks are a variation of a hook and chain model, but instead, use a metal yoke and hydraulics to lift rear tires. This can also pose a risk if the yoke isn’t attached correctly.
Flatbed tow trucks are considered the safest because the vehicle is placed on the truck rather than dragged behind it. While it is safer, there are still risks. If the driver doesn’t properly tie the vehicle down on the bed, it can come loose and turn into a serious hazard. Loose cargo can crush other vehicles, property, and people.
Even the best driver can experience the unexpected. A mechanical malfunction, obstacle on the road, or user error can lead to serious injury and property damage. That’s why tow truck insurance is so important whether you run a commercial towing business or own a truck for personal use.
If you are looking for coverage, make sure you avoid these common tow truck insurance mistakes.
Choosing the Highest Deductible Because It’s Cheaper
It’s no secret that if you want to get the lowest insurance rates, you will likely have to choose a higher deductible. This might seem ok in the short term, but it can cause expensive problems in the long run.
When an accident happens, you will be on the hook for a large sum of money before your insurance will pay for anything. It’s not a good position to be in, especially if you are experiencing financial hardship at the time the incident occurs.
You need your tow truck insurance to provide affordable coverage that will get you back on the road fast. Make sure you choose a deductible that is low enough that you can reasonably pay it if you had to but high enough to keep your premiums down.
Not Asking About Insurance Payment Options
Most insurers offer multiple payment options for tow truck insurance. You should choose a method that will work best for you. Breaking it down into smaller payments might make it more financially sustainable.
Some insurance companies offer discounts if you can pay in full. It might be a large amount at once, but it could save you money throughout the year.
Not Researching the Insurance Company First
You should know who you are buying tow truck insurance from before you sign on the dotted line. The carrier you choose must be reliable and trustworthy. It should be a company that’s been in business for a while with many happy customers.
Also, make sure you read through your policy before agreeing to it. Know what is covered and what you will have to pay for in case of an accident or incident. The more information you have the better prepared you will be if something happens.
Skipping Garage Liability Insurance Coverage
Even if you don’t own a garage, you might need garage liability insurance. This coverage pays if something happens during day-to-day operations. You don’t have to own a physical garage to use it.
Some tow truck drivers offer roadside assistance. If they cause damage to a person’s car while performing this type of service, they could be liable. For example, if you change someone’s tire and they drive away and end up getting into an accident because the tire fell off, your garage liability insurance would kick in to cover the damages.
Even when you have good intentions, mistakes and malfunctions can happen. Garage liability protects you and those who call you for services.
Not Asking Insurance Companies About Discounts
Buying tow truck insurance is a balancing act for business owners. They want the most coverage that they can get but also want to keep premiums as low as possible.
You should never assume that the insurance agent you speak to will automatically tell you about discounts. It’s always best to ask directly. They will let you know if you qualify for anything. You may be eligible for additional savings if you have multiple policies at the same company.
Not Understanding Stated Amount vs. Actual Cash Value
If you try to insure your tow truck for replacement cost, make sure you know the difference between “stated amount’ and “actual cash value.”
Physical Damage coverages are now written using either a stated amount or actual cash value. Both options take the value of the vehicle at the time of loss into consideration. The difference is that if your policy uses stated amount, then how much you can recover is limited.
The best option is to make sure you assign an actual cash value that is as close to market value at the time you purchase your policy as possible. This will help you get the tow truck insurance coverage you need without overpaying for it.
Not Buying Physical Damage Insurance
Having auto liability insurance doesn’t mean that your tow truck is also covered. Liability coverage kicks in when you are in an accident and the other driver has medical bills and other related expenses. It will not pay to repair or replace your truck.
Your tow truck insurance should provide physical damage coverage. This includes collision and comprehensive coverages. If you are in an accident, the policy will pay for your vehicle.
Comprehensive insurance is beneficial because it extends coverage to more than just a collision on the road. It will pay out if your truck is damaged due to vandalism, falling objects, theft, or fire.
Tow trucks are expensive to buy. A new model costs between $50,000 and $100,000 or even higher depending on size and features. Make sure you protect your company’s property and shield yourself from the financial fallout of an accident.
Whether you are a new towing business or one that’s been around for years, now is a good time to review your coverage options. Visit Insure Trucking now to learn more about affordable tow truck insurance.