There are many different types of tow truck insurance out there, and they can get a little confusing. One type of insurance that you need to know about as the owner of a towing or wrecker business is auto liability insurance. Now, you might have a few questions. What is auto liability insurance? Why does your tow truck business need it? How much does auto liability insurance cost?
Well, don’t worry – we’ll answer all of those questions.
What is auto liability insurance?
Auto liability insurance protects your business by covering the cost you’re legally obligated to pay if you injure someone or cause property damage in a car accident.
Here’s an example:
Your driver is cruising along when they get distracted by a flock of geese flying overhead. They take their eyes off the road and rear-end the car in front of them. Auto liability would cover the costs you owe to the driver of the other car – medical bills, car repairs, lost wages. It could even help you cover the legal expenses of the accident if the driver decides to sue. Legal fees add up quickly and can really drain a business.
Two of the main aspects of auto liability insurance are bodily injury liability and property damage liability.
- Bodily injury liability helps cover the costs of medical bills and lost wages for the other driver if you’re at fault in an accident.
- Property damage liability helps cover the costs of repairing or replacing the other driver’s car if you’re at-fault in an accident. (It can also cover other property that you might happen to damage, such as fences.)
Why does my tow truck business need auto liability insurance?
The reality is that bodily injury litigation is getting increasingly expensive. So, the cost of insurance claims has gone up, too. Liability insurance can protect you from the substantial expenses of a lawsuit, plus the costs of the other driver’s medical bills and car repairs, which you’re obligated to pay. One sizeable lawsuit is enough to endanger a small business. If you get sued, you’ll be highly grateful for your auto liability insurance.
How much auto liability insurance do I need?
That depends on your business. It also depends on your state – some states have requirements for liability insurance that you have to meet in order to run your tow truck business. You also have to take a look at your contracts. Do any of your contracts require you to carry a certain amount of auto liability insurance? You need enough liability insurance to satisfy both the law and any contracts you may have.
But a word of caution – the state minimum is a real minimum. To ensure that you’re protected against lawsuits, you’ll probably want to get more insurance than the minimum. If you get sued for an amount above your limit of liability insurance, you’re responsible for covering what’s left after your insurance is exhausted.
How much does auto liability insurance cost?
Prices for auto liability insurance vary greatly from business to business. Every business faces a different amount of risk. There are many factors that affect the cost of your tow truck insurance, such as:
- Your drivers: The age, experience, and driving records of the people operating your tow trucks and wreckers have a significant impact on your rates.
- Claims: You may get higher rates if you’ve had a lot of claims because claims indicate that your business is more of a risk to insure.
- Your trucks: The year, make, and model of the vehicles you need to insure all play a part in your rates.
- Your location/tow radius: Where you operate and how far you go factors into your tow truck insurance rates.
- How long you’ve been in business: Established businesses with clean loss records may get lower rates because they’ve proven themselves to be lower risks.
How to save money on your tow truck or wrecker insurance
You can save money on your tow truck insurance by committing to safety at your business and minimizing your risks.
If you have a high standard of safety, you’re less likely to be involved in accidents. Which means that you won’t have to file claims against your insurance. And that means lower tow truck insurance rates.
Here are a few tips for improving safety at your tow truck business:
- Hire the best drivers
- Create safety-focused workplace policies
- Having zero tolerance for distracted driving
- Having pre-trip inspections
- Holding safety meetings every week
- Having continuing driver training and education
So, that’s auto liability insurance in a nutshell. The best way to get an accurate idea of how much tow truck insurance costs is to get a quote. We would be happy to help you shop for the coverage you need at the best possible rate. All you have to do to get started with your tow truck insurance quotes is fill out our online form or give us a call today.