Business Insurance for Tow Trucks

Towing companies depend on commercial auto insurance for protection against auto accidents involving business vehicles. But if an employee gets into an accident while driving a tow truck for personal use, your insurance provider might deny the claim. That's why you might need personal auto insurance as well.

There's no overlap in coverage. Commercial auto insurance won't cover personal errands, and personal auto insurance won't cover business-related driving.

To comply with state laws, vehicles owned by a business must typically carry commercial auto insurance. Another policy, hired and non-owned auto insurance (HNOA), covers personal, rented, or leased vehicles that are used for business.

Going without insurance could result in significant penalties, or even bankrupt your business in the event of an accident.

Bobtail insurance covers vehicles while they're "bobtailing," or being driven without a trailer. This policy provides coverage in a few situations that might otherwise be excluded, such as a tow truck that's headed home for the day, or being driven to a new location.

Bobtail coverage is similar to non-trucking liability (NTL) insurance. Both cover incidents that occur outside of normal trucking operations, and NTL covers trucks whether or not they have a trailer. NTL insurance is often bought as an endorsement to a business auto policy (BAP), which includes auto liability insurance and physical damage coverage for all of the vehicles owned by your business.

Bobtail insurance can cover commercial vehicles owned or leased by a business, along with personal vehicles used for work.

For peace of mind and a comprehensive risk management strategy, it’s important to fully protect your company. To that end, tow truck businesses often carry the following types of coverage:

• Motor truck cargo insurance covers personal belongings inside a towed vehicle and other cargo transported by your business. A form of inland marine insurance, it provides reimbursement for stolen, lost, and damaged items.
• Surety bonds are required in order for tow truck operators to get licensed in certain states. If a customer loses money because your company failed to comply with regulations, a bond would provide financial compensation.
• Occupational accident insurance (OAI) pays for medical treatment and partial lost wages if an owner operator or contractor who's not eligible for workers' compensation is injured on the job.
• Garage keepers insurance provides coverage for vehicles in your temporary care, such as a customer's car that is stolen from your lot.
• Medical payments insurance (MedPay) covers medical costs for an injured driver and their passengers in an accident, regardless of fault.
• Underinsured / uninsured motorist insurance provides coverage when another driver is at fault in an accident, but does not have enough insurance to pay for the damages or injuries they caused.
• On-hook towing insurance pays for damage to customer vehicles being towed by your business. It covers collisions, theft, fires, and similar incidents.
• Physical damage insurance covers repair or replacement of your tow truck in different circumstances. Collision insurance covers damage caused by collisions, while comprehensive coverage is designed for other incidents such as fires and theft.

State laws and clients may require certain types of coverage, such as on-hook insurance or a surety bond. Our licensed agents can help you compare tow truck insurance quotes from trusted providers and find the right insurance solutions for your needs. Fill out our easy online application to get started.

There are a few ways to find cheap tow truck insurance, while still getting the coverage you need:

• Compare rates from different providers. You could contact each insurance company separately, but it's easier with the help of an agent. TechInsurance helps you find affordable tow truck insurance with our easy online application that retrieves quotes from top-rated providers.
• Bundle insurance products. When you buy policies from the same company, you can often combine different types of insurance for a discount. The most popular bundle is a business owner's policy.
• Customize your policy. Choosing lower limits or a higher deductible is an easy way to reduce your premium. However, make sure to choose limits that will cover a potential claim, and a deductible you can easily afford.