Cost of Tow Truck

Insurance 2022:

A Complete Guide

Last Updated: February 11, 2022

The cost of tow truck insurance can be a complex topic to understand. Many factors go into the calculation, and there are also ways to save money on this type of insurance. In this blog post, we will explore how tow truck insurance is calculated and what you can do to save money, so we’ll walk through them all now!

In the US, tow truck insurance generally costs between $500 and $2500 per year, but the price can vary greatly depending on several factors. The main component that affects the cost is the tow truck’s primary use. For example, if you’re using your tow truck for towing vehicles in accidents or breakdowns, your insurance will be more expensive than if you’re only using it for. So, some ways factors may affect the cost of tow insurance. Thus, buckle up and get ready to understand how tow truck insurance is calculated.

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How is the Cost of Tow Truck Insurance Calculated?

Insurance agencies such as Renegade Insurance look at a few factors before calculating the cost of tow truck insurance. Many factors go into the calculation of tow truck insurance, but some tend to be more critical than others.

1. Location

The first factor that insurance companies look at is the tow truck’s location. If you live in a major city, your rates will be higher than those in a rural area. Risk-prone areas will also have higher rates. For example, if your business resides in an accident-prone state or hurricane-prone state, your rates will be higher than someone who lives in a form that is not prone to hurricanes.

2. Type of Tow Truck

The second factor that insurance companies look at is the type of tow truck. There are different types of tow trucks, and each has its classification. Higher-risk trucks, such as those used for towing cars in accidents, will have a higher rate than those used for simple roadside assistance. For example, a flatbed truck used for towing vehicles in accidents will have a higher rate than a simple tow truck. Furthermore, there is a sort of tow truck known as a Not for Hire tow truck, which signifies that this vehicle is solely designed to meet the demands of its owner.

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3. The Primary Use of Tow Truck

The third factor that insurance companies look at is the primary use of your tow truck. If you use your tow truck for towing vehicles in accidents or breakdowns, your rates will be higher. Furthermore, if you use your tow truck for other purposes, such as transporting heavy equipment or hauling cargo, your rates will be lower than if you only use it for towing.

4. Business Type

The fourth factor that insurance companies look at is the business type of your tow truck company. Some businesses are riskier than others. For example, a tow truck company that offers towing and roadside assistance is less dangerous than a tow truck company that offers towing, transport, and heavy equipment moving.

5. The Number of Tow Trucks

The fifth factor that insurance companies look at is the number of tow trucks you have. The more tow trucks you have, the higher your rates will be. The more tow trucks you have, the higher your risk is.

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Ways to Save Money on the Cost of Tow Truck Insurance

There are also ways to save money on this type of insurance. The most common way is to bundle your tow truck insurance with other types of business insurance, such as general liability or commercial auto insurance. This will usually save you around 15%. Different ways to save money on tow truck insurance are:

Driving Logs

If you’re required to keep logs of your business activities, make sure they are accurate. If an accident occurs and the agency finds out that you’ve been falsifying your log entries, it will raise your rates or even cancel your policy altogether.

Maintenance

Maintaining your tow truck is important because if something goes wrong with it while you’re on the job, you could be held liable. Not only will proper maintenance save you money in the long run, but it will also keep you and your tow truck safe.

Good Driving Record

A good driving record is vital for any business owner. If you have accidents or tickets on your record, it can affect your rates. A good driving record indicates that the business has experienced drivers saving money on insurance.

Good Credit

Having a good credit score is essential for your tow truck insurance because if you have poor credit, the company may turn you down. Good credit will save you money because you will get better rates.

Protect your Business and its Drivers

Keeping records of any accidents or mishaps is one of the best methods to save money on tow truck insurance premiums. Even if another driver is at fault, be sure your organization and driver are covered. Tow Trucking business owners can accomplish this by photographing the situation. Take shots from every angle possible. If there are any skid marks, take pictures of them. Remember to take photos of the other vehicle or party as well.

Lastly, do ask for eligible discounts that are available for your business. Furthermore, the more transparent you are with your insurance agency, the better rates you will be offered. Moreover, also have a look at how much is tow truck insurance per month.

Frequently Asked Questions 

Q. What kind of insurance do you need for a tow truck?

Many tow truck plans will cover the following topics: Liability insurance for automobiles (including bodily injury and property damage) Insurance for medical expenses. Coverage for physical damages.

Q. Do tow trucks take insurance?

First and foremost, as a commercial vehicle owner, you are legally obligated to obtain liability insurance. If you are at fault, this coverage will pay for other people’s injuries and property damage.

Q. Does full coverage insurance cover towing?

Many full-coverage automobile insurance policies will cover towing costs incurred as a result of a collision, but not towing costs incurred as a result of a technical issue or breakdown. However, some comprehensive insurance policies only cover towing if you pay extra for roadside assistance.