How Much Is Tow Truck Insurance?

Working with an insurance provider who has experience insuring towing firms will help them manage the risks unique to their industry and can also help them achieve the best premium rates. Towing insurance needs to be tailored to meet the unique risks associated with each business, according to a qualified, certified insurance agent with experience in the field. You may be sure that you are obtaining the greatest rates and paying only for the coverage that your company requires by comparing insurance products.

Premium Cost Specifics

In 2020, the national average monthly cost for a single tow truck utilized for routine roadside and recovery towing was $450, or roughly $4,500 to $5,000 per year. State law also mandates the purchase of a general liability insurance policy; the typical cost of such coverage for a small tow truck business ranges from $97 to $159 per month. Your insurance agent ought to be able to assist you in creating a policy that meets those fundamental needs.

The premium charges will vary depending on a number of factors, including your business’s unique characteristics.

The average basic premium cost is about $7,500 a year, per vehicle, for instance, if your company is an auto body or repair shop that uses a tow truck to support your principal repair operation. Due to the added dangers these firms face, the average premium price per truck rises to $10,000 if your tow truck offers repossession services.

These average premium costs are based on data from throughout the country, so they might not accurately reflect what you should anticipate paying for the same coverage. Your expenses will change based on a variety of factors, including your operating risks and organizational needs.

Continuity of Service

Since accidents involving your drivers are more likely to occur at night, premiums for tow truck companies that offer round-the-clock emergency services increase.

Having a Parking Lot

Your liability risk is fairly low if your business solely entails picking up and putting off cars because you only have them in your control for a brief period of time. If you own the lot where the vehicles are kept, things become more difficult. For a few days or weeks, you must care about keeping them secure. Former automobile owners may attempt to steal their vehicles back if you are involved in repossessions, posing a security and financial danger to you.

Our transportation system would not function without tow trucks, which also help after an accident, retrieve vehicles for lenders after a loan default, and transfer autos between dealerships or auctions. Operators of tow trucks have highly precise requirements for insurance, including protection for their drivers, trucks, and other drivers on the road as well as for the customer’s car while it is being towed.

Operators should be aware of the variables influencing their premium since each company has a unique risk appetite.

How Much Does a Tow Truck Cost to Insure?

A commercial tow truck insurance rate is determined by a number of variables, many of which are unique to your company’s location and industry. It’s essential to have a local insurance agent on hand to discuss the varied costs because of this.

Distance Traveled

The longer you drive, the higher the costs will be for your auto insurance. Greater kilometers equal more chances for mishaps. Because of this, tow truck operators in rural areas pay more for insurance. Given that different states have different minimum coverage requirements, those costs increase even further if your business involves interstate commerce.

Location of the Business

Insurance companies generally charge tow truck firms operating in dense metropolitan regions greater premiums compared to less-trafficked rural ones because more automobiles on the road result in more accidents. Additionally, the percentage of uninsured drivers in your area is taken into account when calculating your premiums.

Age of the Company

Insurance firms are experts at determining risk, but they can’t make a reliable assessment if you’ve just been in operation for a year or two. Insurance companies feel more comfortable giving established firms lower premiums even if your record isn’t entirely pristine.

Monthly Cost for Different Tow Truck Insurance Types

Operating a towing company has a variety of dangers, and several different types of insurance are required to meet state requirements.

General Liability Protection

Tow trucks must carry liability insurance just like private vehicles, but the cost is significantly greater due to the nature of their job and the number of daily miles they travel. A tow truck’s liability insurance typically costs $450 per month.

Physical Damage Protection

In the non-commercial auto insurance market, this is the same as collision and comprehensive coverage, which takes care of any harm done to the towing vehicle. If you finance your tow truck, you must have it since it protects you in case of an accident, shop fire, or vehicle theft. Physical damage insurance often increases your insurance cost by about $200 per month, depending on the worth of your car.

On-Hook Coverage

On-Hook coverage protects tow truck drivers from any harm they might cause to a customer’s vehicle while it is being towed. It covers the operator in the event of an accident separately from the liability insurance.

Your level of coverage and deductible impact the price of this on-hook insurance. On-hook insurance typically costs the same as tow truck insurance but increases the premium by about $50 per month.

Keeping a Garage Insurance

You’ll need insurance if your firm stores things, as a body shop might, to safeguard a customer’s vehicle while it’s unhooked from the tow truck and waiting for repairs. The number of automobiles kept in the garage and its location affect the sort of coverage available. Typically, monthly insurance premiums range from $60 to $160.

Employee Compensation

Being a tow truck driver is an inherently risky job, and accidents do occur. Tow truck operators are required to maintain worker’s compensation insurance in order to safeguard their employees’ way of life in the event of an accident. Each state has a separate minimum level of coverage, so if your drivers are traveling over state boundaries, they’ll need insurance that satisfies or exceeds those standards. Employers pay 8% of the earnings of their employees on average for worker’s compensation insurance. If your drivers earn $50,000 annually, insurance will cost each employee about $330 per month.

Insurance for tow trucks nationwide

Pros

  • High levels of client satisfaction
  • Adaptable add-ons
  • a variety of reductions
  • Best financial stability High AM

Cons

  • Not accessible in each of the 50 states
  • lacks sector-specific insurance protection

In 1925, Nationwide Insurance was established. The trustworthy wrecker insurance provider is situated in Columbus, Ohio, and offers supplemental coverage. Your Nationwide tow truck insurance covers liabilities (such as bodily injuries, medical expenses, and property damage), collisions, comprehensive insurance (which includes protection from natural disasters), medical payment coverage, and uninsured/underinsured motorist coverage.

Despite the fact that the company only provides insurance coverage in a few states, customers can rest easy knowing that their policies are being underwritten by an insurer with solid financial standing. Additionally, it provides excellent customer service and 24-hour claims reporting via phone, local agent, email, mail, or online.

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