Ontario Tow Truck Operators Call for Insurance Premium Reductions

Tow truck operators in Ontario are advocating for lower monthly commercial auto insurance premiums due to a significant decrease in road traffic caused by the COVID-19 pandemic, resulting in drivers being less active.

Recently, major insurers like Aviva Canada and Intact Financial Corp. announced financial relief initiatives for customers operating commercial vehicles. These programs include premium rebates, adjustments to coverage limits, and flexible payment options.

However, many policies stipulate that vehicles must be parked for at least 30 days to qualify for rebate credits, a requirement that towing companies argue is impractical for their industry.

The situation has left numerous tow truck companies in Ontario grappling with hefty monthly premium payments while their business volumes remain critically low. “Not reducing insurance premiums for towers during the COVID-19 pandemic could severely threaten their operational viability and service quality,” warned Mark Graves, president of the Provincial Towing Association of Ontario (PTAO).

The PTAO, which represents over 180 towing and recovery firms in the province, has contacted both insurers and government officials to highlight gaps in the current insurance relief efforts. Intact’s relief measures for commercial truck clients, which include tow operators, involve premium adjustments for small businesses facing closures or reduced operations, as well as options for suspending coverage of idle vehicles.

Meanwhile, Aviva Canada indicated in a letter dated April 16 that commercial auto insurance policyholders might be eligible for premium rebates if their vehicles are off the road. Yet, many tow truck operators face challenges in qualifying for coverage reductions due to financing arrangements that do not allow them to drop coverage, even if their vehicles are stationary.

Mike Gassum, co-owner of North Algonquin Towing, shared his struggles, noting, “Since mid-March, my business has dropped by 90 percent.” He described a dire situation where, despite operating a fleet of 11 specialized trucks for various towing needs, he cannot simply “park” any of his vehicles to cut costs. He emphasized the need for insurers to consider adjusting premiums to reflect the substantially reduced demand for services, which may not recover fully for the next two to three years.