Tow Truck Insurance Cost: Typical Rates and Coverage Options

Tow Truck Insurance Cost: Typical Rates and Coverage Options

If you’re thinking about starting a trucking business, or you’re an owner-operator, you might find yourself wondering, “What does tow truck insurance cost?” It’s an important question, and the answer can seem somewhat confusing.

This post unpacks everything you need to know about getting truck insurance for your fleet or vehicle. We’ll discuss the factors that influence insurer risk profiles, what you can expect to pay for your policy premiums, and what you can do to lower your insurance costs.

Are you ready? Let’s dive in.

How Much Does Tow Truck Insurance Cost?

To give you a short answer to your question, the average cost of tow truck insurance in the United States varies between $97 to $159 per month for policy premiums. This policy will give you anywhere from  $1,000,000 to $2,000,000 in general liability cover, based on your payroll, the size of your fleet, and other factors.

That might sound expensive, but it’s better than the alternative of going with no insurance for your vehicle or fleet. If you drive uninsured, you could end up in huge trouble in court, resulting in millions in legal liability that could sink your business and leave you bankrupt.

The costs of your insurance premiums depend on several factors, and we’ll discuss those in a bit. The insurer uses this information to create your “risk profile,” which determines the policy premium cost. These factors include the size of your vehicle, the cargo you haul, whether you drive interstate or within state lines, the driver experience, and your credit score.

These factors add up to give the insurer an idea of the “risk” involved with insuring you – in other words, what is the potential of you filing a claim, and what will the value of the estimated claim be for the accident and liability coverage you need?

Why Do Tow Truck Drivers Need Insurance?

According to data from NHTSA, tow truck drivers have twice the national average for risk when it comes to insuring them. They are at higher risk of incurring liability from injuries and occupational fatalities, so the premiums are usually higher than other types of trucking insurance.

Operators could experience an injury while transporting vehicles or while hooking up the damaged vehicle to their truck. Since tow truck drivers often have their best days when the weather is bad, you’ll also be out on the road in these conditions, making for risker driving and the potential for accidents, and the insurer considers this risk when calculating your premiums.

Tow truck drivers collecting repo vehicles are also at risk from physical violence brought on them by disgruntled or agitated owners. Along with these additional liability issues, tow truck drivers need all the regular liability cover received by other truck drivers and owners.

Insurers understand the risks facing tow truck owners, and they often have specialist policies for your coverage. With specialized insurance, you get a cheaper insurance cost compared to taking general cover. As a result, you get comprehensive coverage for all liabilities you encounter on the road.

What Cover Do I Get with Tow Truck Insurance?

Due to legislation, all tow truck operators and independent owners must have minimum liability coverage for their business. If you’re a fleet owner, then you’ll have to ensure you cover all the vehicles in your fleet, and owner-operators must adhere to minimum coverage requirements before they can apply for contracts with towing companies.

Tow truck drivers can face huge liability costs if they don’t have the right amount of liability coverage in place before they get into an accident. Suppose there is an accidental death or severe property damage. In that case, you could end up in court or jail if you don’t have the right amount of coverage to meet the liability responsibilities of the accident.

Some of the additional liability coverage required by tow truck drivers includes the following.

Liability Insurance

This policy covers you for incurring bodily injury or damage to property when in an accident that’s your fault. Drivers require minimum liability coverage of between $15,000 to $30,000. This cover will also help you pay for any legal costs involved with the claim.

Medical Liability

If there is an injury to you or your passengers on the job, medical liability coverage will cover the costs of medical care for everyone involved in the accident.

Physical Damage

This policy covers you for damage to your truck, regardless of the party that is at fault. The policy covers all physical damage, and it’s a requirement for any fleet owner or independent owner-operator that leases or finances their vehicle from a lender.

Comprehensive Insurance Policies

Taking comprehensive policies for liability coverage is the best option for tow truck drivers. If someone vandalizes your truck or sets it on fire, you have cover for repairs or replacement of your vehicle. Typically, this coverage extends to all non-collision-related insurance claims for your tow truck.

Underinsured and Uninsured Motorist Protection

This policy covers any accidents you have with uninsured motorists on the road. You get coverage if the other party doesn’t have the right cover or doesn’t have the finances to repair your vehicle.

Garage Servicing Protection

Many tow truck drivers wait for calls at garages or service stations. This policy covers you if anything happens to your vehicle while waiting at these venues.

On-Hook Insurance

This policy covers problems occurring when hooking a vehicle up to your tow truck or the transportation of the vehicle. The cover also includes vandalism, fire, theft, and collisions. The cost of the policy premiums depends on the amount of liability coverage you have and the types of vehicles you regularly carry.

In Closing – Get Quotes and Lower Your Premium Costs

It’s a good idea to get quotes from several insurers when selecting your policy. To get the best rates, play the insurers up against each other. You also have the right to ask for a discount on your premiums each year if you stay claim-free.

If you want cheaper premiums, ask the insurer to raise your deductible or consider paying all your premiums in one go at the start of the year.

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