Driving a tow truck is naturally risky, with drivers frequently operating on congested highways and, in adverse weather, hauling automobiles weighing a ton or more. Given these risks, proper tow truck insurance is vital to protecting your business from lawsuits and damage to your vehicle and those you tow or may encounter on the road.
Tow Truck Insurance
Tow truck insurance, also known as commercial truck insurance, is designed to protect the vehicles you tow while they are in transit or while they are being stored in your garage. Towing company owners frequently require additional non-truck-related business insurance, such as general liability insurance, workers’ compensation insurance, and commercial property insurance.
To put it differently, tow truck insurance is a type of commercial insurance that protects tow truck drivers and their businesses from financial losses that may occur due to their work. This type of insurance can cover a variety of expenses, including:
- Damage to the tow truck or other vehicles involved in an accident
- Medical expenses for injured parties
- Legal fees
- Loss of income
The cost of tow truck insurance varies depending on several factors, including the driver’s experience, the type of tow truck they drive, and the state where they operate. In general, tow truck insurance is more expensive than personal car insurance.
There are several ways to reduce the cost of tow truck insurance, including:
- Maintaining a good driving record
- Taking a defensive driving course
- Getting multiple quotes from different insurance companies
- Insuring with a company that specializes in commercial truck insurance
Tow truck insurance is vital to protect tow truck drivers and their businesses. By understanding the different types of coverage available and the factors that affect the cost of insurance, tow truck drivers can find the best policy to meet their needs.
Commercial Tow Truck Insurance
Commercial tow truck insurance protects against the risks caused by running a towing company. Damages to the tow truck, medical bills from on-the-job injuries, and legal fees if the driver is sued are all examples of what this category covers. Moreover, commercial tow truck insurance is crucial because it can protect drivers from financial ruin in an accident.
Commercial tow truck insurance has many advantages, including the ones listed below.
- It can save you a lot of money if you ever get sued.
- If your tow truck is damaged in an accident, it can help you recoup the money needed to fix or replace it.
- If you get hurt at work, it can assist in paying for your medical bills.
- It provides financial security if something goes wrong.
If you operate a tow truck business, it is vital to have commercial tow truck insurance. This type of insurance can help protect you from financial ruin if something goes wrong while on the job.
Here are several businesses that require commercial tow truck insurance:
- Auto repair shops
- Automobile mechanical repair
- Roadside service providers
- Rotational towing
- Full-service stations
Tow Truck Insurance Cost
Generally, tow truck liability insurance starts at $300,000 and goes up to $1 million. Tow truck insurance costs an average of $450 per month. Every business is unique and requires unique coverage to defend itself from threats.
The variety, location, and size of tow truck operations make providing average cost estimates difficult. Other underwriting variables include the business owner’s experience, claims history, and other factors. For commercial car and property damage coverage, most single-truck towing firms should expect an annual cost of $5,000–$7,000 annually.
Physical damage coverage ranges from $1,000 to $3,000, while on-hook coverage has an annual premium of $4,000 to $10,000.
Finally, the cost of wrongful possession insurance fluctuates depending on how much of the company’s revenue repossessions represent. Annual surcharges can reach $10,000 for operations that generate 25% or more of their revenue from the repo sector.
Just as your tow truck company is distinct from the one down the street, insurance providers consider numerous aspects when calculating the cost of your towing vehicle.
- Number of insured trucks.
- Size, age, model, and condition of your truck
- The qualifications of the driver(s) and their driving records
- Your annual coverage and the routes you’ll take
- The types of loads you will transport
Tow Truck Insurance Requirements
Federal law requires tow truck drivers in the United States to carry auto liability insurance, and some states also require medical payment coverage. If your company employs people, consider investing in workers’ compensation insurance, which covers medical bills for injuries.
What Tow Truck Insurance Covers?
Physical damage
Protect your tow truck in the event of physical harm. Wrecker Insurance will help you repair your tow truck. This protects your car from vandalism, theft, natural disasters, and fire damage.
Uninsured or underinsured motorists
Towing company insurance covers costs if your tow truck is involved in a hit-and-run or is at fault for a driver without enough coverage for car and medical claims.
General liability for garage keepers
General liability covers fire, theft, vandalism, and crashes involving a client’s car in your garage or service station.
On-hook towing
Indeed, garagekeeper general liability protects your business if a vehicle is damaged while being towed. It will cover repair or replacement costs and damages caused by a collision, fire, theft, or vandalism.
Medical payments
Tow truck drivers frequently provide rides for the owners of the vehicles they are hauling. Tow truck insurance covers medical expenses for accidents involving you, your driver, or passengers.
Hired auto general liability coverage
Hired auto coverage protects the vehicles you lease, hire, rent, or borrow for business purposes. This includes vehicles you or your workers drive for business purposes not included in your policy.
Hired auto physical damage
This tow truck insurance policy protects against physical damage to non-owned automobiles, such as rentals or leases. This policy will pay for damages if you or an employee are involved in an accident and damage the vehicle while it is being used for business reasons.
Employer’s non-ownership general liability
This will protect you if a private vehicle is used for commercial activities at your company and is damaged in an accident.
Tow Truck Insurance Companies
#1. Progressive
Progressive is a trusted provider for commercial trucking companies and provides a comprehensive range of coverage options for towing companies. Business owners can obtain a quote online or over the phone.
#2. Geico
Geico provides towing insurance for both individual automobiles and fleets. Get quotes over the phone and manage claims online with Geico’s website and mobile app. Furthermore, business owners can combine tow truck insurance with other types of business insurance or personal auto insurance.
#3. Prime Property & Casualty Insurance
Overall, Prime Property & Casualty Insurance provides tow truck drivers with customized coverage, including those with a history of accidents or a high rate of past claims. Prime also insures high-risk enterprises, such as repossession tow truck companies. However, coverage is limited to only ten states.
Cheapest Tow Truck Insurance
Whether your company is well-established or just starting, finding the right coverage at an affordable price is vital. The size of your vehicles, driver histories, and safety programs can all impact how much you pay for tow truck insurance. However, you may have lower rates if these aspects can be removed.
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#1. Progressive
Progressive is one of the best options for cheap tow truck insurance. They offer coverage to small and large towing firms and policy savings for business owners who maintain a good driving record or participate in their Smart Haul (r) program.
#2. Liberty Mutual
If you operate a tow truck, you must have adequate insurance coverage. Liberty Mutual offers its customers commercial tow truck coverage with various savings and benefits. The tow truck insurance cost varies depending on multiple criteria, including the vehicle’s type and size, age, and safety features. To determine a suitable premium, Liberty Mutual employs a risk analysis process.
Your driving history and location can also impact the cost of your insurance. For example, drivers in less risky places often pay cheaper premiums than those in more dangerous areas. Furthermore, the organization provides a variety of discounts, including student-away-from-school and violation-free rates. If you meet specific criteria, you can reduce your monthly cost.
#3. biBERK
BiBERK is one of the best solutions for the cheapest tow truck insurance. This subsidiary of Berkshire Hathaway specializes in small business coverage with policies such as worker’s compensation, general liability, and cyber insurance.
Professional liability coverage is included in your business owner’s policy, protecting you from claims relating to your services. This coverage may consist of errors, omissions, intellectual property infringement, libel, and slander.
BiBERK also provides commercial auto insurance to cover your vehicles when used for business. This coverage assists in covering damages caused by accidents, vandalism, theft, and fire.
The cost of this policy will vary depending on your driving record, car type, and chosen level of coverage. However, remember that Biberk’s direct-to-you method can help you save up to 20% more than other insurers.
#4. Geico
Geico offers a variety of discounts on car insurance policies, which helps lower the cost of coverage. Many are associated with vehicle equipment or safe driving practices, while others are industry-specific.
Discounts can be coupled with other types of coverage to build the best policy for you and your needs. A bundling discount, for example, can save up to 8% on overall coverage costs.
Another way to save money on Geico auto insurance is to choose an accident-free driving option, such as their Drivewise program. The scheme rewards drivers who stay accident-free for five.
Are Older Trucks Cheaper to Insurance?
It all depends on your definition of “older.” After five years, insurance premiums for all vehicles drop because more used components are readily available.
Another thing is that car insurance is suited to personal preferences and your location. In general, the newer the vehicle, the better its safety and security. This could imply that a new car is less expensive to insure than a used one. However, replacing a new car may cost an insurance company more than replacing an old one.
See: Elephant Car Insurance Review: Comprehensive Guide
Why Is Commercial Insurance So Expensive?
Several reasons contribute to the high cost of commercial car insurance. Because commercial cars are often used for business purposes, they are on the road more frequently and are more likely to be involved in an accident.
What Is the Biggest Trucking State?
Texas ranks first on the list, with approximately 172,000 truck drivers employed. Truckers have 15 of every 1000 employees in Texas. Texas has a reputation for being a major transportation industry epicenter, and its share of the industry grows annually.
How Much Is Tow Truck Insurance in California?
A minimum coverage general liability policy for a tow truck company typically costs between $97 and $159. An insurance professional can assist you in creating a policy that is specific to your needs.
Is It Cheaper to Get Commercial or Personal Insurance?
Commercial auto insurance rates are typically higher than personal ones since businesses face more liability and property damage claims while transporting or delivering people, commodities, or supplies.
How Much Does Tow Truck Insurance Cost in Texas?
The sum varies depending on the number of cars you possess and the type of business you run. To give you an idea of the usual cost of tow truck insurance, general towing and recovery services may cost roughly $4,500. In contrast, body shop or auto repair services may cost around $7,500.
How Can I Reduce My Commercial Insurance Cost?
As new procedures and technologies become available, investigate them and devise a strategy for implementing those that will provide the most tremendous benefits to your company. Maintain consistency in training and evaluate your safety regulations regularly so that you can make improvements and updates as needed.
Is Commercial Insurance Difficult?
In particular, small and medium-sized firms (SMEs) may feel the effects of the demanding commercial insurance market. These companies may have a more challenging time getting the insurance protection they need, or they may have to pay more each month for the protection they acquire.
What State Pays Truck Drivers the Most?
Truck drivers in Washington, D.C. and Alaska receive the highest compensation, with New Jersey following behind.
Conclusion
This concludes our review of tow truck insurance. Please accept my deepest gratitude for reading this. However, if you did not find the answers you were looking for in this post, I encourage you to consult with insurance experts, shop around, and then make the best choice for your company.
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