Keep your towing business protected with comprehensive tow truck insurance!

Tow Truck Insurance

The tow truck business is profitable but comes with many risks and liabilities while on the road. Tow truck insurance is a specific coverage designed to protect drivers and their vehicles from potential risks.

Tow trucks perform high-risk activities like roadside assistance, vehicle recovery, and transportation of disabled vehicles, so having the right insurance coverage is crucial for drivers’ safety and vehicle protection. Also, it is very important for the financial security of tow truck businesses as it covers accidents, damage to property, injuries to people, and other unfortunate incidents that can happen during towing operations.

In this blog post, we will discuss various types of insurance coverage that tow truck businesses should consider and the importance of selecting a reputable insurance provider.

Types of tow truck insurance coverage

You must thoroughly understand the insurance policies available if you want to protect your towing business against potential losses. Here are some important coverage options you should consider:

Tow Truck Liability Insurance

During towing operations, any vehicle or person in the vicinity is at risk of damage or injury. Liability insurance protects you by paying medical bills, legal fees, and property damage costs.

To avoid financial losses, it is crucial to have coverage for any human or property damage caused by a tow truck. Without such insurance coverage, you will be forced to pay large sums out of your pocket, which will be disastrous for your business.

Importance of Liability Limits

Tow truck companies must ensure they have sufficient liability limits, as this is the maximum amount the insurance provider will pay out in case of a claim. If a catastrophic accident occurs and the liability limits are insufficient, the company could lose a lot of money.

However, if the company has high liability limits, it will help in legal compliance, financial protection, reputation management, peace of mind, and employee welfare.

By investing in comprehensive coverage, you can safeguard your business and focus on providing the best towing services possible.

Additional coverage options

Uninsured/underinsured motorist coverage is an optional extension of liability insurance that protects the business in an accident with someone who does not have sufficient insurance to cover the damages.

Another option is medical payments coverage, which will cover medical expenses for an injured person in a tow truck accident.

These additional coverage options can provide tow truck businesses with added protection and safety.

Physical damage insurance

Ensuring the protection of your tow truck is crucial for running your business smoothly. Physical damage insurance protects you from both accidental and non-accidental damages.

Non-accidental insurance protects against theft, vandalism, fire damage, or natural disasters.

However, accidental/collision coverage will protect you if your towing vehicle collides with another or immovable object. This insurance covers the expense of fixing or replacing a vehicle after an accident.

Choosing Insurance Deductible

A deductible is the portion of an insurance claim you are responsible for paying. Your insurance provider will cover the remaining amount.

Budget and risk tolerance affect deductible selection. If you can afford a higher deductible and want to lower monthly costs, consider it. If you want to pay less out-of-pocket for insurance claims but are willing to pay higher monthly premiums, a lower deductible may be better.

Budget and risk tolerance are factors that impact choosing deductibles. If you have the financial capacity to bear a higher deductible, you can choose a lower monthly insurance premium. On the other hand, if you prefer to minimize your out-of-pocket expenses for insurance claims, opt for higher monthly premiums.

Factors affecting the cost of physical damage Insurance

Several factors play a significant role in determining the cost of physical damage insurance. For example, the value and age of the insured vehicle, the location of your business, and the specific type of coverage you choose. 

If a business is located in an area vulnerable to natural disasters, the insurance premiums and deductibles may be higher due to the increased risk of potential damage.

When choosing physical damage protection for your towing vehicles, it’s important to consider both accidental and non-accidental coverage and different deductible options. 

Protecting your towing vehicles with the right physical damage coverage protects your valuable assets and ensures that any accidents won’t stop your business from running smoothly.

On-Hook Towing Insurance

When you tow or transport a vehicle, there is always a risk of damage or theft to your customer’s vehicle. On-hook towing insurance protects in such situations but comes with certain limits and exclusions.

Limits and Exclusions

The coverage limit is the maximum amount you will receive in case of damage or theft. This limit varies depending on the policy you select, so evaluating your needs before purchasing the policy is necessary.

Exclusions are specific situations in which your insurance policy will not cover your loss. For example, the insurance provider will not cover your claim if the customer’s vehicle is damaged due to intentional acts or improper loading and unloading. It’s crucial to be aware of exclusions while buying insurance and take necessary precautions to avoid any potential loss.

Garage keepers Liability Insurance

If you offer storage facilities for vehicles, it is mandatory to have garage keeper insurance for your safety. No matter whether the vehicle is in your custody after recovery from an accident or if a customer has parked their vehicle at your storage house for a specific period, such as when they are traveling for extended periods, many people utilize this facility.

If your towing business does not provide a vehicle storage facility, you do not need to purchase Garagekeepers Insurance.

Factors That Affect Tow Truck Insurance Premiums and Discounts 

Several factors can influence your tow truck insurance premiums and discounts. Understanding these factors will assist you in navigating the complexities of insurance and choosing the right coverage for your business.

Factors that will affect your insurance premium include:

  1. Business risk is the biggest factor affecting tow truck insurance premiums. Insurance companies consider local accident, theft, and vandalism rates. Your premiums may also rise if you provide services in congested or high-traffic areas.
  1. Driver history and experience also affect your premium. Insurance companies usually review the driving records of your staff. Drivers with clean records and lots of experience get lower premiums than those with violations or accidents.
  1. The type and condition of vehicles in your fleet also impact insurance premiums. Insurance companies evaluate these vehicles based on value, age, maintenance records, safety features, etc. Well-maintained vehicles with modern safety features have lower premiums than older models or poorly maintained trucks.
  1. Insurance companies also consider the business’s credit score, payment history, and financial statements to determine its ability to pay premiums on time. A financially stable business with a strong credit history may get better insurance rates than a less stable one.

Many insurance companies offer discounts to help you save money on your premiums. Let’s discuss the factors that qualify you for discounts:

  1. You may be eligible for certain discounts when you combine multiple types of coverage, such as property or general liability coverage, with your tow truck policy.
  1. Many insurance companies offer discounted premiums if you install anti-theft devices on all vehicles in your fleet.
  1. Implementing safety measures and providing driver training can also help reduce insurance premiums.

It is important to note that every tow truck insurance provider may have different criteria for determining premiums and offering discounts. 

Tips to Choose the Best Tow Truck Insurance Company 

There are several factors to consider when looking for your company’s best tow truck insurance provider. Here are some pointers to assist you in your search:

  1. Request quotes from multiple insurance companies to compare the costs and coverage options. You’ll better understand what each insurer is offering, which will help you choose the best option.
  1. Look for companies that have been in the industry for a while and have positive customer reviews. Check their financial ratings with reputable agencies. Choosing an insurance provider with a strong reputation and solid financial stability is crucial.
  1. Make sure to assess the quality of their customer service and how quickly they handle claims.
  1. Your tow truck business may have special requirements depending on fleet size, vehicle types, location, and more. Finding an insurer that allows you to customize your policy to meet your specific needs is important.
  1. Communicate with the owners of other towing companies to get recommendations on reputable tow truck insurance companies.

By following these tips, you’ll be able to find the best insurance coverage that meets your business requirements effectively.


Insurance coverage gives you peace of mind. With the right protection, you can focus on providing exceptional service to your clients without worrying about financial setbacks or legal disputes.

Accidents can happen anytime, so tow truck insurance is essential for protecting your business and ensuring long-term success.

By finding a trusted insurer who understands the unique challenges faced by towing companies like yours, you can operate confidently, knowing that any unfortunate events like damages to your vehicle, liability claims from others, and injuries to your employees or customers will be handled efficiently. 

Don’t risk facing devastating losses – invest in insurance today.


1. What types of coverage does tow truck insurance include?

Tow truck insurance typically includes the following:

  • Liability coverage.
  • Physical damage coverage.
  • Medical payments coverage.
  • Uninsured/underinsured motorist coverage.
  • On-hook coverage (for damage to vehicles being towed).
  • Garage keepers coverage (for damage to customer vehicles while in your care).

2. Does insurance provide coverage in case my tow truck breaks down?

Generally, tow truck insurance does not cover breakdowns or mechanical failures. However, you can purchase additional coverage, such as roadside assistance or mechanical breakdown coverage, to protect against these situations.

3. Can I add additional coverage during busy seasons?

Absolutely! Many insurance providers understand the seasonal nature of certain businesses and offer flexible policies that can be adjusted to meet your needs during peak seasons. 

4. Will my insurance rates increase after an accident claim?

Insurance rates can increase after an accident claim, particularly if you have a history of making frequent claims. Insurance companies consider accidents as indicators of increased risk and adjust their rates accordingly. 

5. How can I lower my tow truck insurance premiums?

To lower premiums, it is important to maintain a good safety record, increase deductibles, and compare quotes from different insurers.

6. Is it mandatory to buy insurance before starting a towing business?

Purchasing an insurance policy is mandatory and a smart and responsible decision for any towing business owner looking to operate with peace of mind and confidence.

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