Running a tow truck business comes with its liabilities and risks. You generally have to haul the heavy machinery and equipment from its original location to any of the following locations:
- An accident scene
- Garages of mechanics
- Or any residential property
You will share the road with other car owners and motorists during the process. Sometimes, you will have to pull vehicles like cargo vans or box trucks under mean weather. This is where the tow truck insurance comes into play for protecting your business from property damage and claims while you are doing the towing process. Many businesses invest in tow truck insurance costs because it serves as a financial cushion and forms an amazing business trust among the client.
Insurance coverage may be needed before conducting business. For instance, some states want tow truck business owners to follow the rules and regulations of the specific states. To secure the contracts, it is required to purchase general liability insurance coverage. In this article, we will talk about the aspects of tow truck insurance and how much is tow truck insurance cost.
What Is Tow Truck Insurance?
Insurance for a tow truck is also called wrecker insurance. You can protect your livelihood with HGV insurance – it is your best cover against the damages that occur due to fire, collision, theft, and vandalism. The tow truck insurance coverage also protects the towing business against any type of liability, medical bills, and uninsured motorists.
Other than the towing insurance cost, some companies also require other non-truck-related policies such as commercial property insurance, general liability insurance, worker’s compensation, and bobtail insurance. If your business is in an area prone to natural disasters or catastrophic events, it is best to invest in business hazard insurance and general tow truck insurance.
Why is Tow Truck Insurance Important?
Tow truck insurance is essential because it protects your business from potential liabilities and financial losses resulting from accidents or unforeseen events. It ensures that you can cover repair costs, medical expenses, legal fees, and other damages without jeopardizing your business’s stability.
Who Needs Insurance For A Tow Truck?
Generally, businesses primarily towing disabled vehicles may need liability insurance for the tow trucks. Some other business owners that can invest in tow truck insurance costs per month are those who shelter wrecked vehicles in owned or rented parking facilities.
Other businesses that may need tow truck insurance are:
- Auto club contractors.
- Rational towing.
- Auto body shops.
- Full-service car maintenance stations.
- Auto mechanical repair shop.
Not all towing businesses are the same. Some businesses only tow skid steers, dump trucks, tractors, or excavators. Moreover, there is no one-size-fits-all insurance for a tow truck business. Your business may go through its unique risks. Hence, it is essential to consult the requirements and details with the insurance agent so that they can customize the Insurance according to your business. However, you must keep in mind that it will affect the average tow-truck insurance cost, and you may have to pay extra.
What Is Covered Under The Tow Truck Insurance Policy?
It is necessary to ensure that your business is covering appropriate items for your business. Following are some of the tow truck coverages which you should add to your policy:
- Liability Insurance: The tow truck liability insurance policy will cover any medical expenses you and any third party’s property. This insurance also caters to any bodily injuries caused to the third party and replacement or repair costs of the damaged property.
- Physical Damage Insurance: this type of coverage covers the repairing costs of the vehicle if an accident, theft, fallen tree branch, lighting, or vandalism damages it.
- Non-trucking Liability Insurance: non-trucking liability offers coverage for the accidents the tow truck causes when not used for work.
- Medical Insurance: this insurance coverage will protect you against any medical expenses and the third party in the car incurred for treating the injuries sustained after the crash.
- Underinsured Motorist Coverage: sometimes, you may acquire injuries in an accident caused by an underinsured motorist. In other cases, it is a hit-and-run case. This type of policy will cover the injuries and other associated treatment costs in most cases.
What Is The Cost Of Tow Truck Insurance?
The cost of the tow truck insurance is based on your insurance requirements for tow trucks. For the majority of towing businesses, the tow truck insurance cost per month is about $448, and on a yearly basis, it will be $5,376 and offers about $1 million in general liability coverage.
Some cost-saving practices will help you to mitigate the tow truck insurance cost and have:
- Bundling the insurance coverage with personal car insurance.
- Choose a higher deductible.
- Paying the yearly premium in full.
- Maintain a clean driving record.
- Employ risk management techniques such as signing the hold harmless agreements.
As said, several factors affect towing insurance costs, such as:
- The number of tow trucks you have.
- Operation hour.
- Driving history.
- The type of vehicles your business tows.
- Qualification of the driver document.
- Safety program.
Let us understand the factors more deeply:
- Business Location and Operation Area
A business is situated in a high traffic area where there are higher chances of getting in accidents than the national average. It can cause the premium rate to be higher than the business operating in a less congested area.
- Emergency Hours Of Operations
If the tow truck offers emergency 24*7 roadside services, the premium will be higher than that only works during regular business hours.
- Types of Towing and Trucks
It will also make a difference in the cost of the truck, whether it will be the under-lift wrecker or the rollback carrier. Costly and larger trucks will cost more for the insurance policy.
Several factors affect the tow truck insurance cost and must be studied carefully before making the decision. It is best to try and discuss with different insurance firms to find the best and most appropriate insurance plan for your towing business.
What are the benefits of commercial truck insurance?
There are many benefits of buying Insurance for a tow truck, such as it covers the cost of medical expenses and injuries for the injured third party in case the employed truck driver is associated with the accident.
Why is commercial vehicle insurance necessary?
The commercial vehicle policy not only protects the losses and damages to third parties but also protects the driver and vehicle from the losses that may occur from accidents and other unfortunate situations.
What is excluded from commercial vehicle insurance?
Any claims occurring out of the contract are not included in the Insurance, wear and tear of the tow truck, and electrical breakdown. Make sure to read the deductibles written down on the policy.