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Written byJanet Berry-Johnson
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Janet Berry-Johnson, CPA, is a freelance writer with a background in accounting and income tax planning and preparation. She's been writing for Compare.com since 2023 and has also appeared on various business and finance sites, including LendingTree, Chime, Insurify, Forbes, and WSJ. She’s passionate about making complicated financial topics accessible to readers.
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Edited bySara Getman
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Sara Getman is an insurance editor for Compare.com. With several years of insurance experience, Sara is passionate about helping readers better manage their money by breaking down complex topics into simple, clear, and easy-to-understand language.
Sara earned a Bachelor of Arts in Literature from Simmons University, where she served as editor-in-chief for the school’s literary and art magazine, Sidelines. She has been editing for Compare.com since 2025.
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In This Article
Running a towing business means you take on risk every time you pick up a vehicle, help a stranded driver, or move equipment across busy roads. Tow truck insurance protects you from the financial hit that comes with accidents or damage to a customer’s car. That makes it vital for any towing company owner or operator.
Tow truck insurance goes beyond a commercial or standard personal auto insurance policy because it covers the unique risks that come with operating flatbeds, wheel-lift trucks, and integrated wreckers.
The key to finding the right, affordable coverage is knowing how to choose a commercial auto policy that protects your tow truck business, your drivers, and your customers. Here’s what you need to know.
Key Takeaways
The cost of tow truck insurance is rising, so comparing quotes is crucial.
Rates depend on factors like your location, the type of trucks you operate, and your drivers’ history.
Optional coverages, like on-hook and garagekeepers, help tow truck operators protect against the unique risks they face.
Tow Truck Insurance Explained
Tow truck insurance offers protection tailored to the risks you face on every call. Here’s a breakdown of what it does and doesn’t cover, as well as some optional coverages you might want to consider.
What tow truck insurance covers
A standard tow truck policy includes several essential protections for your business.[1] [2]
Bodily injury liability covers medical costs and legal fees if you injure someone in an accident.
Property damage liability pays for repairs if you damage another towed vehicle or property while towing.
Collision covers damage to your tow truck after a crash, regardless of fault.
Comprehensive pays for loss or damage to your vehicle caused by non-collision events like theft, vandalism, fire, or severe weather.
Medical payments (MedPay) covers medical expenses for you and your passengers after an accident, regardless of who was at fault.
Uninsured/underinsured motorist protects you if another driver causes an accident and doesn’t have insurance or doesn’t have enough insurance to cover your damages.
What tow truck insurance doesn’t cover
Policies typically exclude certain risks or types of losses. Here are a few common ones that fall outside standard protection:
Injuries to your employees (covered separately by workers’ compensation)
Damage to tools or equipment not attached to the truck
Damage you caused intentionally
Business interruptions or lost income after a claim (you may have coverage under a commercial package or business owners policy that includes general liability and commercial property coverage)[3]
Optional tow truck insurance coverages
These add-on protections help you close gaps in coverage and tailor your policy to your operations:
On-hook towing insurance: Covers damage to customers’ vehicles while you’re towing them
Garagekeepers’ legal liability insurance: Protects customer vehicles stored on your property from theft, fire, or damage
General liability insurance: Covers non-automobile claims, like slip-and-fall injuries at your business location
Motor truck cargo insurance: Pays for damage to items or equipment you transport for customers
Workers’ compensation: Covers employee injuries on the job
Find a Commercial Auto Insurance Policy
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Tow Truck Insurance Needs and Requirements
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Anyone using a tow truck for business purposes needs special commercial coverage, as personal or standard commercial auto insurance doesn’t cover the unique risks of towing.
You need this protection if you run a roadside assistance operation, manage an auto body or repair shop, haul vehicles for an auto salvage yard, transport cars for auctions, or operate a repossession or recovery service.
All of these operations involve moving other people’s vehicles and potentially working in traffic-heavy environments, which increases liability exposure.
Tow truck companies also have to carry much higher liability limits than other types of vehicles. The Federal Motor Carrier Safety Administration (FMCSA) requires for-hire tow trucks larger than 10,001 pounds to have minimum liability coverage of $750,000.[4]
Tow Truck Insurance Costs
The cost of tow truck insurance varies widely because every towing company has different risks, and your rates depend on several factors, which we’ll cover below.
Unfortunately, costs are rising. Premiums rose an average of 3% per mile in 2024 after a 12.5% jump the year before, and early 2025 renewals climbed nearly 10%.[5]
Shopping around matters because insurance companies consider risk differently. Comparing quotes helps you find a policy that fits your budget while still giving you the protection your business needs.
Customize Your Commercial Auto Policy
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Factors Affecting the Cost of Tow Truck Insurance
Just as with personal auto insurance, several factors influence how much you’ll pay for tow truck insurance. Insurance companies look at how you operate, your location, and the risks your business faces day to day.
Here are som of the most common factors affecting tow truck insurance rates:[6]
Location
Operating in high-traffic areas raises your risk exposure, which increases premiums.
Type and size of tow truck
Heavier trucks and integrated wreckers cost more to insure because they’re more expensive to repair, and accidents often lead to bigger losses.
Services you provide
Winch-outs, recoveries, and accident scene tows are riskier than basic roadside assistance.
Coverage limits and deductibles
Higher limits increase your protection but also raise your rates.
Employee driving record
Hiring people with clean driving records helps keep costs in check, while a history of moving violations and accidents raises your risk profile.
Claims history
Frequent or severe claims indicate you’re a riskier customer, leading to higher premiums.
Cargo or types of vehicles you tow
Towing high-value or specialty vehicles increases the potential cost of a claim, which affects your rates
Where to Buy Tow Truck Insurance
You can buy commercial tow truck insurance from several major insurance companies, specialized commercial trucking brokers, or local independent agents. It’s a good idea to shop around to compare coverage, limits, and pricing before choosing a policy.
A few companies that offer tow truck insurance include:
Allstate: Several types of commercial insurance policies are available directly or through its partnership with Next Insurance.
GEICO: In addition to commercial auto policies, GEICO offers motor truck cargo coverage and motor truck general liability insurance.
Liberty Mutual: Its commercial auto insurance program offers risk-management resources that can help you avoid claims and save money on insurance.
Nationwide: Nationwide offers BOPs and business auto policies for auto service and repair businesses. BOP policies can cover garage liability and garage keepers coverage.
Progressive: It offers a towing and roadside program with several discounts, including those for allowing the company to access driving data from your electronic logging device.
State Farm: Commercial auto insurance policies can cover several types of vehicles, including flatbeds.
The Hartford: This insurer focuses on small-business coverage with auto liability and physical damage coverage for tow truck operators.
Travelers: Travelers offers commercial auto policies for the transportation industry through its subsidiary, Northland Insurance.
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How to Get Tow Truck Insurance
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Getting tow truck insurance starts with knowing what your business needs and the risks you face. You can speed up the process and get more accurate quotes by following these steps:
Assess your needs. List the types of trucks you use, the services you offer, and the kinds of vehicles you tow so you can identify your coverage needs.
Gather essential documents. Collect employee drivers’ license numbers, vehicle identification numbers (VIN), prior insurance history, and loss runs from past policies.
Decide on your coverage limits. Estimate how much protection you need for liability, physical damage, and optional coverages like on-hook or garagekeepers. Keep in mind the minimum liability limits required by the FMCSA or your state’s laws.
Get quotes from multiple insurers. Compare pricing and policy limits from several insurance companies or independent agents.
Review exclusions and endorsements. Make sure you understand what the policy covers and which losses it excludes.
Choose a policy, and finalize your paperwork. Confirm your coverage start date, and keep digital or physical copies of your policy.
Tow Truck Insurance FAQs
Tow truck insurance follows a different set of rules than personal auto or standard commercial auto policies. These FAQs can help you determine what’s required when comparing policies or checking your current coverage.
Do insurance companies cover tow trucks?
Yes. Many insurance companies offer commercial auto policies designed for tow trucks. These policies account for the higher risks tow truck drivers face when hauling disabled vehicles, working roadside, and operating special equipment.
Do you need insurance for towing?
Yes. Any business that tows or recovers vehicles needs commercial tow truck insurance. Personal or standard commercial auto policies don’t cover towing businesses, so they can leave you exposed to liability and financial loss.
Do tow trailers need insurance?
Yes. Tow trailers need coverage because they can cause damage or get damaged while attached to your truck. Some insurance companies include trailers under your commercial auto policy, but others require a separate endorsement.
Does State Farm cover towing?
State Farm offers commercial auto policies that can include flatbed coverage. But these types of policies might not be available in all U.S. states or locations.
Does car insurance pay for a tow truck?
Your personal auto policy may cover towing if you add roadside assistance. This won’t protect your towing business or your tow truck. It only helps drivers who need to have their own vehicles towed.
Sources
- III. "Business Vehicle Insurance."
- Texas.gov. "Auto insurance guide."
- Naic.org. "Business Interruption Insurance/Businessowner's Policies (BOP)."
- FMCSA. "Insurance Filing Requirements."
- ATRI. "Critical Issues in the Trucking Industry – 2025."
- CCJ. "Why insurance premiums keep rising, and what fleets can do about it."
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Janet Berry-JohnsonPersonal Finance Writer
Janet Berry-Johnson, CPA, is a freelance writer with a background in accounting and income tax planning and preparation. She's been writing for Compare.com since 2023 and has also appeared on various business and finance sites, including LendingTree, Chime, Insurify, Forbes, and WSJ. She’s passionate about making complicated financial topics accessible to readers.
Sara Getman is an insurance editor for Compare.com. With several years of insurance experience, Sara is passionate about helping readers better manage their money by breaking down complex topics into simple, clear, and easy-to-understand language.
Sara earned a Bachelor of Arts in Literature from Simmons University, where she served as editor-in-chief for the school’s literary and art magazine, Sidelines. She has been editing for Compare.com since 2025.
