Essential Guide to Tow Truck Insurance: Coverage, Costs, and Best Choices

Operating a tow truck is a job fraught with risk, as drivers often work on busy streets and in harsh weather conditions while transporting vehicles that can weigh a ton or more.

Due to these dangers, obtaining suitable tow truck insurance is essential for protecting your business against legal claims and any potential harm to both your truck and the vehicles you tow or encounter on the road.

Tow truck insurance generally refers to commercial truck insurance that includes specialized coverage to protect against damage to vehicles being towed, whether they are on your truck or stored at your facility.

Owners of towing businesses typically also require additional non-truck-related business insurance, such as general liability, workers’ compensation, and commercial property insurance.

Here are some common types of tow truck insurance along with their coverage details:

Auto Liability Insurance: Covers expenses related to physical injuries or property damage if you are responsible for an accident, including legal defense costs in case of a lawsuit.

Collision Insurance: Covers the repair or replacement costs for your tow truck in the event of an accident.

Comprehensive Coverage: Pays for repairs or replacement of your tow truck resulting from incidents not involving a collision, like theft or fire.

Medical Payments Coverage: Provides coverage for medical expenses for you and any passengers, including customers being towed.

On-Hook Coverage: Also known as garage keepers legal liability insurance in Texas and Virginia, this covers damage to a vehicle while it is hooked up to your tow truck.

Garage Keepers Legal Liability Insurance: This provides coverage for vehicles while stored or serviced by your company.

Uninsured Motorist Insurance: Covers medical expenses and damages if you or your passengers are injured by an uninsured driver or in a hit-and-run scenario.

All tow truck drivers are required by federal law to maintain auto liability insurance, with minimum coverage limits varying by state. Some states additionally require medical payments coverage.

If you employ workers, investing in workers’ compensation insurance is advisable to cover medical costs for work-related injuries and to protect your business from lawsuits; this is typically mandatory if you have one or more employees.

As of 2020, Progressive indicated that the average monthly cost for tow truck insurance was around $448. While this can serve as a reference, your actual premium will hinge on factors such as location, driving record, and the specific towing services you provide.

You can potentially lower your insurance costs by opting for a full annual payment instead of month-to-month, choosing a higher deductible, or bundling this coverage with personal auto insurance or other types of business insurance.

Progressive is a leading provider for commercial trucking and offers a comprehensive range of coverage options for towing businesses. Business owners can receive quotes either online or via phone.

Geico offers towing insurance tailored for both individual vehicles and fleets. Customers can request quotes over the phone and manage claims online through their website or app, with options to bundle insurance coverage.

Prime Property & Casualty Insurance provides tailored coverage for tow truck drivers, including those with past accidents or a high claims rate. They also specialize in high-risk businesses like repossession, although coverage is limited to only 10 states.