Towing Company Insurance in Tennessee: What Tow Truck Businesses Really Need
Running a towing company is not like running a typical small business.
Your trucks are on the road at all hours. Your drivers are working around traffic, bad weather and disabled vehicles. You may be transporting customer vehicles, storing them overnight, handling police rotation work or doing roadside assistance.
That means a standard business policy usually isn't enough.
A Tennessee towing company may need several different types of insurance working together — commercial auto, on-hook towing coverage, garagekeepers, general liability, workers compensation and more.
At Knoxville Insurance Store, we help Tennessee towing businesses review those moving parts and compare coverage from multiple carriers.
If you'd like us to take a look at your current towing insurance, call us at 865-579-0500.
What Insurance Does a Towing Company Need in Tennessee?
There isn't one insurance package that works for every towing company.
A one-truck roadside assistance business has a very different exposure than a five-truck company doing police rotation, repossessions, heavy recovery and vehicle storage.
But most towing businesses should at least look at the following coverages.
Commercial auto is the foundation of a towing insurance program.
It can provide liability coverage if one of your tow trucks causes bodily injury or property damage in an accident.
You may also need physical damage coverage on the tow truck itself.
That can include collision and comprehensive coverage for things like crashes, theft, vandalism or storm damage.
For many towing companies, the trucks are some of the most valuable assets in the business. Losing one can hurt twice — once from the damage itself and again from lost income while the truck is out of service.
On-Hook Towing Coverage
On-hook coverage protects customer vehicles while they are being towed, hauled or winched.
For example, imagine you're transporting a customer's vehicle on a rollback and it's damaged during the tow.
Your commercial auto liability policy isn't necessarily designed to cover the customer's vehicle that's in your care.
That's where on-hook towing insurance comes in.
Garagekeepers coverage is different.
This coverage is generally designed for customer vehicles that are being stored at your tow yard, impound lot or garage.
If a customer's vehicle is damaged by fire, theft, vandalism or another covered loss while sitting on your property, garagekeepers may be the coverage that responds.
This is one of the most common areas of confusion in towing insurance.
General liability covers the non-auto side of your business.
Think about things like:
- a customer slipping and falling at your office;
- accidental damage to property that isn't part of the towing exposure;
- certain premises liability claims; or
- other everyday business liability situations.
General liability generally is not a substitute for on-hook or garagekeepers coverage.
Towing can be dangerous work.
Drivers may be loading vehicles on the side of an interstate, working in poor weather, handling heavy equipment or responding late at night.
Workers compensation can help protect employees who are injured on the job and can help protect the business from the financial consequences of those injuries.
Commercial Property and Equipment
If you have an office, shop, fenced lot, tools, computers, towing equipment or other business property, you'll want to review property coverage as well.
A fire, storm or theft can interrupt your entire operation.
A commercial umbrella can provide additional liability protection over certain underlying policies.
For towing businesses with larger fleets, larger contracts or significant liability exposure, that extra layer can be important.
On-Hook vs. Garagekeepers: What's the Difference?
This is probably the question we hear most often from towing businesses.
Both cover customer vehicles.
But they cover them at different points in the process.
On-hook coverage generally applies while the vehicle is being towed, transported or winched.
Garagekeepers coverage generally applies while the vehicle is being stored at your location.
Here's an easy example.
You pick up a disabled SUV in Oak Ridge and haul it to your Knoxville lot.
If the SUV is damaged while it's on the rollback, that may be an on-hook claim.
If it's damaged later that night while sitting inside your fenced lot, that may fall under garagekeepers coverage.
Most towing companies that both transport and store vehicles should review whether they need both.
Does General Liability Cover a Vehicle You're Towing?
Usually, that's not what general liability is designed to do.
General liability primarily addresses non-auto business liability.
Customer vehicles in your care generally require more specialized towing coverage, such as on-hook towing or garagekeepers.
This is why simply buying “general liability and commercial auto” may still leave important gaps for a towing business.
How Much Does Tow Truck Insurance Cost in Tennessee?
There really isn't a useful one-size-fits-all number.
A single rollback doing local roadside assistance is going to look very different to an insurance company than a larger fleet handling repossessions, impounds or heavy-duty recovery.
Some of the biggest pricing factors include:
- number of tow trucks;
- value and type of trucks;
- driving radius;
- driver records and experience;
- claims history;
- type of towing work performed;
- amount of vehicle storage;
- security at the storage lot;
- coverage limits; and
- deductibles.
Your loss history can make a big difference too.
A towing company with experienced drivers and clean loss runs may have very different options than a company with frequent accidents or on-hook claims.
That's also why working with an independent agency can help. Different insurance companies look at towing businesses differently.
Can One Policy Cover Multiple Tow Trucks?
Yes.
A towing company with several trucks can usually place multiple vehicles on the same commercial auto policy.
That can make administration easier and gives the insurance company a better picture of the entire operation.
Depending on the carrier and policy structure, on-hook and other towing-specific coverages may also be coordinated across the fleet.
What Information Do We Need to Quote Towing Insurance?
The more complete the information is upfront, the easier it is for us to approach the right carriers.
For most towing businesses, we'll ask for things like:
- business name and locations;
- number of years in business;
- list of trucks and service vehicles;
- VINs and vehicle values;
- driver list;
- driving history;
- description of towing operations;
- towing radius;
- percentage of roadside assistance, police rotation, repo or impound work;
- storage-lot details;
- current coverage;
- current limits; and
- loss runs when available.
For a tow yard, we may also ask about fencing, gates, cameras, lighting and other security measures.
The goal isn't to make you fill out paperwork for fun. 😂
The goal is to give the underwriter enough information to understand the risk and give us the best chance of finding competitive terms.
Why Towing Insurance Gets Complicated
Two towing companies can look almost identical from the outside and still have very different insurance needs.
One may only tow passenger vehicles locally.
Another may handle:
- heavy trucks;
- police rotation;
- non-consent towing;
- repossessions;
- long-distance hauls;
- roadside assistance; or
- vehicle storage.
Those differences matter.
They affect which carriers are willing to quote, what limits may be required and what the policy ultimately costs.
That's why we don't like treating towing insurance as a simple “send me a price” product.
The details matter.
Common Coverage Gaps We Look For
When we review an existing towing policy, a few things tend to stand out.
We look at whether the on-hook limits make sense for the value of vehicles being transported.
We check whether customer vehicles sitting at the yard are properly covered.
We review driver information, truck values, deductibles and liability limits.
We also look for exposures that may have changed since the policy was originally written.
Maybe you started with one truck and now have four.
Maybe you added police rotation work.
Maybe you started storing vehicles overnight.
Maybe you hired employees.
Maybe you began doing repossessions.
Those changes can materially affect your insurance.
Do Towing Companies Need Workers Compensation in Tennessee?
Depending on the number of employees and the structure of the business, Tennessee workers compensation requirements may apply.
Even smaller towing companies sometimes choose to carry workers comp because the work itself has significant injury exposure.
Tow truck drivers routinely work near traffic, handle heavy equipment and respond in poor conditions.
If your employee count or business structure has changed, it's worth reviewing your workers compensation situation instead of assuming the answer hasn't changed.
Why Work With an Independent Agency?
Towing is one of those industries where carrier appetite matters.
One insurance company may have little interest in your type of operation while another may be actively writing it.
Knoxville Insurance Store is an independent agency, so we're able to approach multiple insurance companies rather than being tied to one carrier.
That can be especially helpful for businesses with:
- multiple tow trucks;
- unusual towing operations;
- vehicle storage;
- prior claims;
- higher limits;
- police rotation;
- repo work; or
- a combination of exposures.
Need a Towing Company Insurance Quote in Tennessee?
If you own a towing business, the goal isn't just to find a policy.
It's to make sure the coverage actually fits what your company does every day.
Knoxville Insurance Store can review your trucks, drivers, towing operations, storage exposure and current insurance and compare options from multiple carriers.
Call us at 865-579-0500 to get started.