Driving a tow truck is a major responsibility. Not only are you behind the wheel of a large vehicle but you are typically towing other vehicles of varying value as well. Many tow truck drivers also haul vehicles to their tow yard for repairs or for storage—which means even more responsibility. They must ensure that the vehicles they are towing and storing are protected from damage during the towing process and during storage, or they will be faced with recovering the costs of that vehicle and restoring the damage to it. That requires insurance that goes above and beyond the standard auto insurance policy. Tow truck drivers require commercial insurance and may need to have additional coverage as well.
The Coverage You Are Required to Have as a Tow Truck Driver
All tow truck drivers that tow vehicles of any kind for money are required to have commercial insurance. That insurance will need to provide adequate coverage in the following areas:
- Bodily injury, including hospitalization and medical coverage. This coverage will also include death as a result of an accident.
- Property damage, which covers other structures and the vehicles of other people beyond the tow truck and the vehicle that is being towed at the time
- Physical damage to the vehicle that is being towed
Each state has additional coverage needs that may go over and above these requirements.
Garage Keeper Legal Liability Insurance
If you, as a tow truck driver, never keep another vehicle at your home or your place of business, then you may not need to have this particular type of insurance coverage. If you keep a vehicle that is not legally your own on your property even briefly, then you may need to have this coverage for your own protection. Basically, this coverage is meant to insure every car that is on your property for storage, for repair, or until recovered by the legal owner and will pay for any loss for each vehicle. For example, if you have a single car that is damaged during storage, then the coverage will be for that one car. However, if all of the cars at your business are damaged, the insurance will cover a specific amount for each one.
This type of insurance coverage protects you because you might be open to a lawsuit if damages occur to someone’s vehicle on your property. While their own insurance will cover the loss at first, that company may want to recover some or all of that expense by suing your company.
On the Hook Towing Coverage
As the name implies, this is the coverage that you need during an actual towing. If you are only towing vehicles on the occasional basis or even as a one-time job, you may only need this coverage temporarily. If you are more regular with towing, then you will need it all of the time. Once you hook a car up to your tow truck, you have assumed control of it and are legally responsible for it. If something happens to the vehicle or to other property because of that vehicle, it will be your legal and financial responsibility to take care of. On the hook towing coverage protects you from those events. An example of a covered incident would be a car that you are towing gets scraped on another car when you fail to make a turn correctly. The insurance would cover the damage to both the car that is being towed and the other car that was scraped.
On the hook coverage may extend to cars that are being hauled by flatbed trucks rather than towed behind on the road for any reason, including no longer being drivable.
What Tow Truck Insurance Does Not Cover
There are several limitations to what tow truck insurance will cover. It does not cover your personal vehicles, including those that you are towing with your tow truck. This includes the vehicles that are owned by your business even if they are not used for personal reasons. You will need other commercial insurance for those vehicles beyond the tow truck coverage. Other things that are not covered by your tow truck insurance include the following:
- Antique cars, especially your own
- Race cars or boats for personal use
- Vehicles that are not considered road legal or road safe
Vehicles that fall under these categories that are not yours but are still being towed by you may need to be covered by other types of insurance. It is always very important to speak to your agent so that you know that you are legally and financially protected, especially if the vehicle is fragile or extremely valuable. Some antique cars are so fragile that you might be better served referring the owner to another type of service rather than risk the cost of trying to replace it if you do tow it and something happens.
Getting the Best Insurance Coverage at the Best Price
No matter what type of insurance you need, you always want the best coverage for the best price available. That often means shopping around and comparing prices. It also means comparing prices every time that you need to renew or change coverage even if you have been previously satisfied with the coverage and service that you have been using.
Insurance laws change frequently, so there may be some changes that will affect price. Companies may also try to keep you as a customer and will find discounts for you if they know that you are shopping around for new coverage. Make sure that you are not over- or underestimating the liabilities of your company—including how many tows you do per week/month/year and how many vehicles you are capable of storing at your property. You will want to be insured for every liability even though that will mean a higher premium. Protection and peace of mind for you and your business should be worth that added cost.