If you own a tow truck or a towing business, you may have noticed that your tow truck insurance rates are on the rise. Wrecker and tow truck businesses come with a significant amount of risk, which is why the insurance rates can be so high. Anyways, with the way things have been going, you might be a bit concerned about the cost of tow truck insurance.
How much does tow truck insurance cost?
Every business is different and faces different risks, so every tow truck business will pay a different price for their insurance. The insurance company will look at a number of important details about your towing operation to determine how much to charge you for your insurance. However, we’ve got some loose ballpark estimates for different types of towing businesses below.*
- Rural business with minimum limits of coverage: $1,000/year (One truck)
- Metro area business with recommended limits of coverage: $6,000/year (One truck)
- A business with tickets and accidents: $20,000/year (One truck)
- Over 25% repossessions: $10,000/year (One truck)
- Incidental towing (Towing as part of another business, such as an auto repair shop): $4,000/year (One truck)
*Rates may be lower or higher depending on your business.
What factors affect the cost of tow truck insurance?
Your insurance rates can be affected by the age and experience of your drivers. Their MVRs (or Motor Vehicle Records) can also affect your tow truck insurance. An MVR gives a report of the driver’s record and notes things like tickets and accidents. If you drivers have good MVRs, chances are you’ll save money on your insurance because they’ve shown themselves to be safe on the road.
Tickets and accidents/Loss-runs:
Tickets and accidents are indicators of risk. So, if your business has accrued tickets, accidents, or other claims, you may face higher tow truck insurance prices because you’re more likely to have another claim.
Prior to giving you a quote, an insurance company will most likely want to see your loss-run, which is a record of all the claims your business has faced. The more claims you have, the more of a risk you are. As we said, “riskier” businesses will probably have more expensive insurance. It might even be difficult for a business with tickets, accidents, or other claims to find tow truck insurance at all.
Your tow trucks.
Whether you have wreckers or rollbacks, the value of your tow trucks will impact your tow truck insurance rates. The insurance company will want to know the year, make, and model of your trucks. The more expensive your trucks are, the more they will cost to insure. That’s because any loss will be costlier – it takes more money to repair or replace a bigger, more valuable tow truck. So, the GVWR (gross vehicle weight rating) factors into your insurance rates.
The size of your fleet.
Every single one of your trucks needs to be properly insured. The more trucks you have, the greater your potential for loss, the more expensive your insurance.
We mentioned above that every business faces their own risks (a.k.a. exposures.) These risks can come from the line of work you’re in. Are you a roadside assistance business? Strictly towing? Repo? Auto repair shop with a wrecker? Each of those has different insurance needs that can influence your insurance rates.
How long your business has been around.
If you have an established, mature business that’s been around for a while, there’s more data and information for the insurance company to review. If your towing business has a good loss record (meaning few losses) that goes back a few years, you’ll probably get better insurance rates than a newer company.
What you haul.
What you tow can also have an impact on your tow truck insurance rates. Your business may tow only new cars, only used cars, a mix of new and used cars, expensive cars, disabled cars. The type of load that you typically transport impacts your rates because if your cargo is on the more expensive side, any loss will most likely cost more. And that means you’ll have higher insurance rates.
Where you’re located/radius.
Your radius of operation affects your premium, as does crossing state lines. Your location – rural versus metro – can also influence your rates. As you can see from our above list, rural towing businesses may pay less for their insurance than metro businesses.
The cost of tow truck insurance can get a little complicated. The fact that rates vary so much from business to business is why you need to get a tow truck insurance quote to find out exactly how much your insurance will cost. Our team of transportation insurance experts can help you with that. We’ll help you shop for the best possible rate for your insurance so that you know you’re getting the coverage you need at a great rate. All you have to do to get a quote is fill out our online form or give us a call today.