Tow Truck Insurance: What It Is, How to Get It

Operating a tow truck is an inherently risky job, with drivers often operating on busy roads and in inclement weather, hauling vehicles that weigh a ton or more.

Given those hazards, having the right tow truck insurance is critical to ensure your business is protected from lawsuits and damage to not only your truck but those you tow or may encounter on the road.

Tow truck insurance typically refers to commercial truck insurance with specialized coverage to guard against damage to vehicles you tow, whether they’re on your truck or stored at your service station.

Owners of a towing business often need other non-truck-related business insurance as well, such as general liability insurance, workers’ compensation insurance and commercial property insurance.

Here are the common types of tow truck insurance and what they cover:

• Auto liability insurance: Pays expenses related to physical injury or property damage if you are at fault in an accident. It also covers legal defense costs if you are sued due to your involvement in an accident.

• Collision insurance: Pays to repair or replace your tow truck if it is damaged in an accident.

• Comprehensive coverage: Pays to repair or replace your tow truck if it’s damaged in an incident that’s not a collision, such as fire, theft, falling objects or animal damage.

• Medical payments coverage: Pays medical expenses for yourself and any passengers injured in an accident, including customers who ride along while their vehicle is towed.

• On-hook coverage: (Also called garage keepers legal liability insurance in Texas and Virginia.) Pays to repair or replace a vehicle that is damaged while hooked up to your tow truck.

• Garage keepers legal liability insurance: (Also called storage location insurance in Texas and Virginia.) Covers damage to a vehicle while it’s being stored or serviced by your company.

• Uninsured motorist insurance: Pays for costs associated with any injury to you or your passenger caused by a driver who doesn’t have insurance or during a hit-and-run incident.

Federal law requires all tow truck drivers to have auto liability insurance, though limits on minimum coverage vary from state to state. Some states also mandate medical payments coverage.

If you have employees, bank on getting workers’ compensation insurance, which covers medical expenses for on-the-job injuries and shields your business from costly lawsuits. Workers’ comp is required in most states if you have one or more employees.

Progressive reported an average monthly cost of $448 in 2020 for its tow truck insurance. That figure can serve as a benchmark but won’t necessarily reflect your insurance costs.

Why? Because the cost of tow truck insurance depends on your location, driving history and the type of towing you do. The coverage and limits you select will also factor into your annual premium.

You can save money on tow truck insurance by paying your annual premium in full instead of monthly, opting for a higher deductible or bundling your coverage with personal auto insurance or other types of business insurance.

Progressive is a go-to provider for commercial trucking companies and offers a full range of coverage options for towing businesses. Business owners can get a quote online or by phone. Progressive carries a superior (A+) rating from AM Best.

Geico offers towing insurance for single vehicles and fleets. Quotes are available by phone and claims can be managed online through Geico’s website and the mobile app. In addition, business owners can bundle tow truck insurance with other business insurance or personal auto insurance. Geico carries a superior (A++) rating from AM Best.