It takes more than having a fleet of trucks and reliable drivers to operate a successful tow truck business. Part of it requires having extensive knowledge of insurance requirements. Whether you are running a tow truck business as a seasoned pro or a newcomer, understanding vital insurance components of the industry is necessary.
As a business owner, you never want to have your business in a position that could lead to fines, penalties, or the threat of closure. When you are educated about the intricacies of tow truck insurance requirements, you can ensure your business can handle the twists and turns that come with the industry.
What You Need To Know
Insurance requirements for tow truck businesses ensure the protection of your business’s assets as well as compliance with legal regulations. Requirements usually include minimum insurance coverage, liability limits, and other state-specific rules.
Auto Liability Insurance
Tow truck businesses are almost always required to have auto liability insurance. It’s a policy that will protect against damages or injuries that are caused by third parties in accidents that involve your business’s tow trucks. Minimum coverage requirements vary by state but usually range from $300,000 to $1 million in liability coverage.
For example, Florida requires tow trucks that weigh less than 35,000 pounds to carry coverage of $50,000 combined in a single limit policy. Tow trucks that weigh between 35,000-39,999 pounds have to carry $100,000. Lastly, vehicles that weigh 40,000 pounds or more have to carry a minimum of $300,000.
Cargo Insurance is another aspect that may be required by your state. It will cover any damage to the vehicles that one of your tow truck drivers is towing. It also covers any personal belongings left in those transported vehicles during transport.
Liability limits are also state-specific. These limits are put in place to determine the maximum amount your insurance policy will pay you in the event of a claim. Some tow truck businesses choose to get higher limits so they receive better coverage and protection.
In Tow (On Hook) Coverage
It’s designed to protect vehicles while they are being towed. This is a critical aspect of tow truck insurance, as it covers damages that may occur while a vehicle is physically attached to a tow truck. Tow truck drivers may have to tow vehicles long distances on busy highways or interstates. Performing longer-distance tows creates many opportunities for a vehicle to potentially be damaged.
In Florida, tow trucks have to carry a minimum of $50,000 in coverage for vehicles that are in tow or on hook.
If part of your operation involves repossession of vehicles, you may be required to obtain wrongful repossession insurance. This is a form of protection that will protect your businesses against wrongful repossession claims.
Personal Injury Protection
It will cover medical bills, lost wages, and other related costs that result from injuries sustained in an auto accident. This benefits tow truck drivers since they work in high-risk environments.
In Florida, tow truck operators have to carry personal injury protection with a minimum limit of $10,000.
Helping You Meet Your Insurance Needs
Selecting the right insurance coverage can be the difference between success and hardship. Forerunner Insurance Group can help you understand and comply with state-specific tow truck insurance regulations, while also providing you with comprehensive insurance benefits that will protect your business. Forerunner Insurance Group offers tow truck insurance that meets legal requirements and gives you peace of mind.
Please contact us to get in touch with one of our experienced insurance professionals. We’re eager to begin helping you with acquiring a tailored insurance plan based on your business’s needs. We look forward to working with you!