On-Hook Towing Insurance

What is on-hook tow insurance coverage?

On-hook tow coverage is a specialized insurance for tow truck operators, covering damages to vehicles being towed. This coverage protects the towed vehicle against risks such as accidents, theft, fire, and vandalism while it's in transit. Essential for towing businesses, it ensures that any damage to customers' vehicles is covered, safeguarding the company from potential financial losses and liability claims. By including on-hook tow coverage, towing companies demonstrate a commitment to customer service and financial responsibility, building trust with clients and mitigating operational risks.

What are the benefits of having on-hook towing insurance?

If your business is engaged in providing towing services across states, investing in on-hook towing insurance can save your company from any financial strain and also keep your operations smoothly running. Here are its additional benefits:

Repair & replacement: You get covered for repairing and replacing the on-hook vehicle which gets damaged in an incident.

Medical expense: If someone gets injured in the process of towing or hooking the vehicle in the tow truck, this insurance coverage will compensate for the medical expenses of the injured person.

Lawsuit expenditure: If you get sued after causing damage to the on-hook vehicle on the road or in the process of hooking it to the tow truck, this insurance coverage pays for the legal expenditure.

Property damage: If any property gets damaged in the process of towing or hooking the vehicle and you get sued for it, this coverage pays for the legal expenses.

What does on-hook towing insurance cover?

On-hook towing insurance coverage protects your customer's vehicle that gets damaged during the hauling session. The moment you hook a vehicle in your tow truck, you are entirely accountable for every damage that happens in the haul until it reaches its destination.

The damages can be minor such as scratches or dents, but sometimes it can go out of hand. In both scenarios, you are financially responsible for making things right which can range from repair to even replacement.

If you take adequate on-hook liability insurance, you get protected against:

• Theft
• Vandalism
• Collision
• Explosion
• Fire

This coverage also covers the damages while hooking or unhooking the vehicle.

What is NOT covered?

On-hook towing coverage does not cover the following:

• Damages to own vehicle (your tow truck) which you are using to move on hook cargo or vehicle.
• Damages occurred to an unhooked vehicle.
• Physical injuries that happen to own tow truck drivers or passengers in an accident.

Why is there a need to take on-hook towing insurance?

Common auto liability insurance or even your existing tow truck insurance might not offer coverage for vehicles that belong to others. Therefore, if you provide towing services, you must carry on-hook towing coverage.

Without this policy, your towing business can face significant financial loss if your drivers damage your client's vehicle. It is a better and financially smart decision to carry adequate commercial towing insurance.

Therefore, if you own repair shops, service stations, auto-keeping warehouses, and body shops, you can take this coverage for protecting your client's assets. Please note, this insurance requirement varies from state to state.

What is the cost of on-hook towing insurance?

Although there are several factors that affect on-hook towing insurance, an average tow truck business owner is likely to pay between $350 to $800 every month.

Here are a few factors that determine your towing insurance cost:

• The type of vehicle you tow (new, totaled, used, etc.)
• The model and age of your tow truck
• The choice of deductible
• The location of your business and the radius you offer towing services
• The number of tow trucks you own

The major determiner of your on-hook towing coverage is the limit you choose which falls between $10,000 to $250,000. Most towing businesses opt for higher limits due to the great risks involved in their operations.

The deductible is another biggest factor. Most deductibles in this policy are set at $500. You can increase it to $1,000 or higher to save a few dollars on your monthly or annual premiums.

How can you save money on your on-hook towing insurance?

Driving logs: If your drivers are working for extended hours without required breaks then it increases the rate of accidents on the road. The more claims you file, the higher will be your premiums. Maintaining a log of driving hours helps you save money on your coverage.

Competent drivers: Make sure you hire skilled drivers because they are the ones who are responsible for towing the cargo. Check their driving records, age, and experience in the field.

Truck maintenance: A well-maintained tow truck is likely to experience fewer damages in an accident than a non-kept one. This puts drivers and the towed cargo at low risk which helps in minimizing the cost of towing insurance.

Continuous training: Giving your drivers continuous training will ensure the safety of the on-hook cargo. A highly trained driver takes utmost precaution and makes fewer mistakes than a non-trained driver.

On-Hook Towing Insurance FAQs

Who requires on-hook towing insurance?
Businesses and independent truckers who provide towing services and roadside assistance or own service stations, body shops, or repair stations need this insurance.

Does the garagekeepers insurance cover the on-hook vehicle?
No, garagekeepers insurance covers the insured against vehicle damage happening inside your facility and does not protect the on-hook vehicle. However, in Texas and Virginia, on-hook towing coverage is also known as garagekeepers legal liability coverage.

What is counted as on-hook cargo?
Any vehicle which is attached to your tow truck is counted as on-hook cargo. Your on-hook towing coverage will only protect the hauling session. If damage happens to an unhooked vehicle, you will either pay it out of your pocket or be covered by another policy (if taken).

What should your on-hook towing insurance cover?
You can customize your on-hook towing coverage and get your operations safe against all road risks. However, this policy should cover: the cost of repairing or replacing the on-hook vehicle; damages caused by explosion, fire, theft, or vandalism; and collision.

In what scenarios is on-hook towing coverage not applicable?
On-hook towing coverage is not applicable if: vehicles which are transported are personal or owned by the business; towing cars (especially luxurious wheels) for personal use.

Does an insurer pay for the towing?
Maybe yes or maybe not. Check your towing coverage policy — if it includes providing road assistance then you would get paid for it. You need to see how much distance is covered, otherwise you would pay it from your own pockets.