Tow truck insurance is something very different compared to personal auto insurance. Tow truck owners are required by the state to carry liability insurance. Just as you need proper insurance coverage for your vehicle, a boom-truck, wheel lift or flat bed tow truck needs a special set of coverages. One different type of coverage usually found on a tow truck insurance policy is “On Hook Coverage.”
On-Hook Tow Truck Insurance
On-Hook Towing insurance will cover repair or replacement to damaged vehicles you don’t own if it is damaged by a collision, fire, theft, explosion or vandalism while you are towing or hauling them. Simply stated, on-hook coverage for tow trucks offers coverage for damages to vehicles being towed.
Commercial Towing Insurance Program
Liability insurance for tow trucks is a very common coverage found in a policy. Liability will provide coverage for bodily injury and property damage to any third-party. Another common coverage option is comprehensive coverage and collision. Think of comprehensive and collision as full coverage tow truck insurance.
A tow truck insurance policy will also normally include liability coverage for personal and property damage and personal injury protection. In addition, the tow truck insurance will also provide collision and comprehensive coverage such as fire and theft. Coverage options vary by company, and so you need to make sure that you review these options carefully with your licensed insurance professional.
Tow Truck Certificate of Insurance
When renewing or applying for tow truck registration, most states will require an insurance policy that indicates certain limits of insurance coverage. These limits vary from state-to-state but typically require liability and on-hook coverage.
Evidence, or proof, of insurance is requested in the form of a certificate of insurance for tow trucks. A certificate of insurance is a single page document that outlines coverages found on a policy. The state will usually request to be listed as certificate holder. Below is an example of an Illinois Certificate of Liability Insurance from the Illinois Secretary of State.
In the state of Illinois, minimum limits of insurance for tow trucks are:
- Automobile liability — $500,000 combined single limit
- Garage liability — $500,000 combined single
- On-hook coverages — $25,000
- Garagekeepers — $25,000
Tow Truck Insurance Costs
There are many factors that exist when an insurance company determines a tow truck insurance premium. Usually, rates are determined by state and specific territory. Other factors that make up your tow truck insurance quote include:
- Type of tow trucks. There are many types of tow trucks an insurance company will insure such as wheel-lift, wrecker, rollback, flat bed, auto transporter, etc. The higher the value, for example, the higher collision and comprehensive coverage will cost.
- Nature of operations. A tow truck company that specializes in repo, repossession, work is obviously more susceptible to risk and will pay a higher premium than others.
- Driver details. Just like personal car insurance, insurance carriers for tow trucks like to see a reasonable number of drivers in a certain age range, experience, and favorable MVR, or motor vehicle record. Tow truck drivers with a bad driving record still qualify for tow truck insurance, just at slightly higher rates.
- Loss runs. Think of loss runs as an insurance history record for a business. Any prior losses, usually from 3-5 years, will show on a tow truck company’s loss runs.