How Much Does Tow Truck Insurance Cost?
When towing a vehicle, it is the responsibility of the tow truck owner to make sure that no harm comes to the vehicle while in tow. For this reason, having the right towing insurance is vital to every towing business. A tow truck has specific insurance needs and requires an insurance provider with the right qualifications to meet these needs. Getting the right insurance policy is extremely important since it does not only protect the owner’s financial assets during an accident or loss, but the cost is very high compared to the cost of insuring regular cars.
How much does it cost?
- Like car insurance, there are going to be many factors that you will need to consider when getting a policy. The average tow truck owner, however, reports paying around $400 to as much as $1,200 per month for an insurance policy.
- For instance, Towinsurance.com, a provider of tow truck insurance for auto, property and general liability, offers different types of coverage. Its Garage & Auto insurance includes the following:
- General Liability – $1M/3M; Auto – $1M
- Garage Keepers Legal – $1,000 Ded – $500,000
- Uninsured/Underinsured Motorist – State law; PIP/No Fault – State law
- Physical Damage, $1,000 Ded – ACV; Medical Pay – $5,000
- Fire Legal Liability – $100,000; Dealers Physical Damage – $100,000 (Used Cars – Optional); and On Hook, $1,000 Ded – $250,000.
- Property insurance includes: Building/Contents – Repl. Cost; Tools & Employee Tools – Inc.; Business Int/Extra Expense – Per Limit; Tools & Radios Off Premises – Per Limit; Special Form – Inc.; and Deductible – $500.
- A policy such as the one noted above could run anywhere from $475 to $1,200 per month depending on the exact model of tow truck, the state and a few other various factors that are noted below.
- At Gicunderwriters.com, the maximum limit is $1,000,000 for garage liability and $500,000 for garagekeepers legal liability. Maximum coverage per vehicle is $35,000. GKLL will be $500 deductible per vehicle for collision and $500 per vehicle $2,500 maximum deductible for Specified Perils. The company also offers wrecker liability insurance, which is intended for a tow truck operator in Florida only, towing a vehicle from an accident, to a repair shop or from road side assistance. The maximum liability limits $1,000,000 CSL BI & PD and maximum physical damage limits $75,000 per vehicle. The tow truck businesses insured are: light tow truck – single axle; medium tow trucks – single axle; light – duty wrecker; and small flat bed car carrier tow truck.
- According to a press release from insurance agency InsuranceNavy, primary tow truck liability insurance is usually set at $750,000 each occurrence from every towing service that needs State filing in Illinois, with garage liability insurance having similar limits.
What is going to be included?
- Apart from the usual commercial auto insurance for the tow truck, coverage must also include the following: on-hook coverage, which pays for damages caused while a customer’s vehicle is in tow up to a specific limit; garage liability, which covers injury or property damage caused by another person as an effect of the towing service; garage keepers liability coverage, which covers vehicles against damages caused while the vehicle is stored in the tow truck owner’s premises; and cargo coverage, which covers items and contents inside vehicles being towed.
What are the extra costs?
- Getting further insurance coverage is usually recommended, with some insurers recommending liability insurance, medical payments insurance, physical damage coverage and uninsured motorist insurance. These types of insurances can cover the towing company in case of a law suit.
Factors that influence the price:
- Type of coverage. As mentioned, tow trucks require various types of coverage. Typically, the most expensive aspect of tow truck insurance is primary liability.
- Tow truck type. There are different types of towing vehicles. These include light single axle, medium and/or heavy-duty dual/triple axle, rollback carriers, underlift wreckers, and car carriers among others. Also, the size of a tow truck can affect the price of an insurance policy, with bigger tow trucks requiring higher insurance coverage.
- Vehicles to be towed. Insurance premiums can also be influenced by the type of vehicles to be towed. Many tow truck companies tow vehicles only, and also vehicles and motor homes. Others tow heavy equipment, trailers, motorcycles and boats.
- Driver record. Insurance companies look at a tow truck driver’s experience and past performance. Tow trucks driven by excellent drivers often get modest discounts in their insurance plans. Normally, driver qualification files are required by state and federal safety carrier policies.
- Hours of operation. Towing companies can either be a 24-hour business or it can be like most businesses that close at the end of the day. The type of business that a tow truck company runs can likewise affect the insurance costs involved.
Tips to know:
- Find an insurance provider who is solely focused on providing insurance for the transportation industry, particularly one that has been exclusively working with towing services and companies that cater to this business.
- Some insurance providers may require a minimum premium for towing services.
- Talk with four to five insurance providers and compare their insurance policies before making a decision.
How can I save money?
- Employ a driver with exceptional driving skills who holds a clean driving record. Insurance companies often provide discounts to tow truck owners who employ drivers with an excellent record.
- Ask about discounts for tow truck businesses that have been operating for a number of years.
- Consider getting a seasonal insurance plan. This may lower insurance coverage and will likely just cover items that are absolutely necessary when a tow truck is merely kept in the garage during a slow season.
- Other ways to reduce insurance cost include increasing the deductible, paying insurance in full, paying via EFT, and insuring other vehicles in the same business organization.
- Get free quotes from several insurance providers and find the most cost-effective option. Talk with the insurance provider and ask about a comprehensive tow truck insurance policy package that can answer the needs of the tow truck.
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