Any business offering towing services must have tow truck insurance. Make sure you understand how this required coverage will fit in your business budget.
Over 12 years writing about insurance and personal finance
Emily is a Plutus Award-winning freelance writer and former educator who makes complex financial topics easy to understand. She specializes in the science behind money habits and has written for outlets like The Huffington Post, Business Insider, and The Washington Post.
3+ years experience in insurance and personal finance editing
NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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Tow truck insurance is a specialized commercial auto insurance policy for a small-business owner or independent contractor who operates one or more tow trucks, wreckers, flatbeds, or tractors.
Tow truck insurance has some similar types of coverage found in personal auto insurance, but a tow truck insurance policy also covers business risks. This commercial insurance typically has higher coverage limits than personal policies.
If your small business involves towing disabled vehicles, here’s what you need to know about tow truck insurance coverage.
Quick Facts
Progressive and The Hartford both offer specific tow truck insurance policies, while most insurers only offer generic commercial auto insurance.
Tow truck insurance costs may vary depending on the business’s location, tow truck size and type, and the driving records of the employees driving the tow trucks.
For extra financial protection, towing companies may choose to add garagekeepers legal liability, on-hook towing, and tow general liability insurance to their commercial policy.
What tow truck insurance covers
While the specific coverage needs for your tow truck business may vary depending on your state’s legal requirements, a typical tow truck insurance policy includes the following coverages:
Bodily injury liability
If you or your employee is in an accident while using the tow truck for business purposes, bodily injury liability coverage will help pay the medical bills of an injured third party.
Collision coverage can help pay for repairs or replacement costs to the company’s tow truck if you or an employee hits something, like another vehicle or a tree.
Comprehensive
If the tow truck incurs damage in a non-collision incident — such as theft, vandalism, or extreme weather — comprehensive coverage will help pay for repairs.
Medical payments
If you or your employees have accident-related injuries, medical payments coverage will help pay the medical bills.
Uninsured/underinsured motorist (UM/UIM)
UM/UIM coverage will help pay for your or your employees’ medical bills or damages if an uninsured motorist causes an accident with your tow truck.[1]
Optional tow truck insurance coverages
Towing businesses may also add some optional tow truck insurance coverages to their commercial insurance policies, such as the following:
On-hook towing insurance: On-hook towing coverage will help pay to repair or replace a customer’s vehicle that incurs damage while hooked up to your business’s tow truck.
Garagekeepers legal liability insurance: If a customer’s car sustains damage while stored in your facility for safekeeping, garagekeepers coverage will help pay to repair or replace the vehicle.
Tow general liability insurance: If you’re legally liable for bodily injury or property damage not directly related to your covered vehicles, tow general liability policies will help financially protect your business.[2]
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Who needs tow truck insurance?
Anyone using a tow truck for business purposes must have commercial vehicle insurance coverage for their tow truck. Some of the common professions that may need a tow truck insurance policy include:[3]
Auto body shops
Auto club contractors
Auto salvage and auction haulers
Full-service gas stations
Property management companies
Roadside service providers
Rotational towing
Tow truck insurance cost
Several factors affect tow truck insurance premium costs. Insurance companies will consider your business’s location, specific industry insurance requirements you must follow, and any particular risks your business faces.
Since costs can vary widely, it’s important to get quotes from a number of different insurers. Shopping around is the best way to ensure you’re getting the best coverage for your business’s needs at the right price for your budget.
Where to buy tow truck insurance
You can find commercial tow truck insurance through major insurers, specialized brokers, and local agents.
The well-known insurers in the list below could be a good place to start your search:
Allstate:Allstate’s website doesn’t indicate whether the company offers tow truck coverage as part of its commercial auto coverage. You’ll have to call for a quote.
GEICO: GEICOdoesn’t include tow trucks in its list of covered commercial vehicles, but it may be worth requesting a quote.
Liberty Mutual: You’ll need to contact a Liberty Mutualagent for more information about tow truck insurance.
Nationwide: ContactNationwide to find out if you can get coverage for your tow truck under its commercial auto insurance.
Progressive: Towing businesses can get the tow truck insurance they need, plus optional add-on coverages, through Progressive.
State Farm: State Farmdoesn’t list tow trucks as a covered commercial vehicle, but you should contact an agent to request a quote to know for sure.
The Hartford: Business owners can get the tow truck coverage they need throughThe Hartford. Start a quote by contacting a local agent.
Factors that affect the cost of tow truck insurance
Just like with private auto insurance, several factors affect how much you pay for tow truck insurance.[4] Here are some of the factors insurance companies may consider when determining premiums:
Location: Your business’s location — including your state, city, and ZIP code — can affect your premiums. Insurance companies may consider location-based risk factors, like legal requirements for insurance, crime statistics, weather, and more.
Size and type of tow truck: The specific make, model, and year of your tow trucks can affect the premiums your insurer charges.
Coverages you select: Adding optional coverages will increase your vehicle protection, but it’ll also increase your premiums.
Coverage limits: The dollar limits you set for your coverages will also affect the cost of premiums.
Employee driving records: If any of your employees have a poor driving record, your insurer may increase your premiums.
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How to get tow truck insurance
When you’re ready to purchase tow truck insurance for your business, you can follow these steps:
1. Gather necessary information about your business
You’ll need to provide each insurer with information about your business operations. This includes how many and what kinds of tow trucks you have, how many drivers you employ, the services you provide, your claims history, your annual revenue, and more.
2. Compare quotes
Request quotes from multiple insurers so you can compare coverage levels and costs.
3. Choose your insurer
Once you’ve decided on an insurer, set up a payment system that works best for your business’s cash flow. Many insurers will give businesses a discount for paying up front, but you may find it easier to pay a monthly premium.
4. Maintain coverage
Avoid any lapse in coverage, and meet your state’s insurance requirements. This is especially important for a small-business owner with a tow truck insurance policy.
Tow truck insurance FAQs
The following information can help answer your remaining questions about tow truck insurance.
Do insurance companies cover tow trucks?
Yes. Not all insurance companies offer commercial auto insurance policies or specific tow truck insurance coverage, but many insurers do.
Do you need insurance for towing?
Yes. If you’re driving a commercial tow truck, you legally have to carry insurance for it.
Do tow trailers need insurance?
Not necessarily. A tow trailer doesn’t have a motor, so it doesn’t technically need insurance. But your auto insurance policy won’t cover damage to the trailer itself or any of its contents. You’ll need a separate tow trailer insurance policy for that.
Does State Farm cover towing?
State Farm offers commercial auto insurance, but the insurer’s website doesn’t specify tow trucks as one of the vehicles it covers as part of its commercial auto policies.
Does car insurance pay for a tow truck?
No. Personal car insurance is a separate type of insurance policy, and it won’t cover the use of a tow truck. A tow truck insurance policy is a legally required kind of commercial auto insurance policy for any business that offers towing as part of its services.
Emily Guy Birken is a former educator, lifelong money nerd, and a Plutus Award-winning freelance writer who specializes in the scientific research behind irrational money behaviors. Her background in education allows her to make complex financial topics relatable and easily understood by the layperson.
Her work has appeared on The Huffington Post, Business Insider, Kiplinger's, MSN Money, and The Washington Post online.
She is the author of several books, including The 5 Years Before You Retire, End Financial Stress Now, and the brand new book Stacked: Your Super Serious Guide to Modern Money Management, written with Joe Saul-Sehy.
Emily lives in Milwaukee with her family.
Emily has been a contributor at Insurify since October 2022.
3+ years experience in insurance and personal finance editing
NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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