Why are my tow truck insurance rates going up so much?

If you work in the tow truck industry, you’ve probably noticed a few changes when it comes to insurance – namely, the cost of your tow truck insurance premium rocketing upwards. As if tow truck insurance wasn’t pricey enough, it’s only gotten worse. The jump in rates has been enough to make more than a few tow truck companies close their doors.

But why is this happening, and why now? Why does it seem like your insurance company is charging you a crazy rate when just last year things were reasonable? There are several reasons for the chaos that is the tow truck insurance industry, and we’ll try to make sense of the changes that have been affecting towing companies around the nation.

Why are tow truck rates going up so much?

Well, it’s not just the tow truck industry that’s getting hit by higher insurance rates. Commercial auto insurance rates are going up in general. There are more drivers on the road, which means more accidents and more insurance payouts. Distracted driving plays a large part in these accidents, as does a lack of safe driving habits. Commercial auto claims are also becoming more severe, meaning that they’re larger and more expensive. This is partly because of the costs of medical care, auto parts, and auto repairs have also been rising.

According to an article by Nicholas Porto titled “Battling the Rising Costs of Towing Insurance” in the May 2017 issue of Tow Times, there are three reasons that tow truck insurance rates are going up, up, and up.

1. Tow truck insurance carriers are backing away from the industry as if it were a venomous snake.

2. Towing is not a cheap industry due to the equipment needed.

3. Towing is a highly dangerous industry.

Why are tow truck insurance carriers leaving the market?

The reason why insurance companies are treating tow trucks like venomous snakes – the approach being to stay calm and back away slowly – relates to the second and third reason listed above. The towing industry presents a lot of risks, and when there are a lot of risks there’s a high chance that a company will need to file a claim. Because the trucks themselves and the equipment needed for towing are so expensive, there’s a good chance that the resulting claim will be a big one.

So, long answer short, insurance carriers have decided that risk is a bit too high for their liking. Insurance companies don’t like to live on the edge.

What are some of the risks that insurance companies are so worried about?

As we mentioned before, towing cars that are stranded on the side of the road isn’t exactly the safest job in the world. Drivers have to hop out of their trucks and work to secure the broken car on the side of the road, all while other cars are whipping past at highway speed. It’s scary – there’s a good chance they could get hit.

Plus, tow truck drivers are operating very heavy, very large vehicles that have a big potential for causing damage. Not to mention that they have other peoples’ cars in their care. Anything can happen on the road. Distracted driving is also a big risk in the towing industry. There are lots of temptations that can take a driver’s attention off the road. But when you’re driving a tow truck that’s hauling someone else’s car, the potential fallout from a lapse in focus can be astronomical.

Rescuing stranded cars and their grateful drivers isn’t the only thing tow trucks are used for. Repossessions are another risk that insurance companies are often leery of. There are a lot more perils if a towing company does repos. People typically don’t like it when their car gets taken away against their will, so the owner of the vehicle being repossessed may or may not take out their frustration on the tow truck driver (to put it nicely.) Tow truck drivers who do repos might have to collect cars in the middle of the night to avoid the angry-driver scenario, and since speed is the name of the game when you’re snagging a repo vehicle there’s high potential for loss.

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What can your tow truck business do to keep its premiums down?

The insurance industry isn’t something that we can control. The business owner doesn’t have a say in what their carrier decides to do when it comes to covering tow trucks. However, there are some things that your company can do to lower its risks and, in turn, do its best to keep premiums down.

1. Enforce safety.

To avoid losses and claims, making sure that your drivers are safe is one of the best things you can do to help your company. You don’t want your drivers to get into an accident, so you need to stress safe driving habits and implement a distracted driving policy that prohibits texting and anything else that could take the driver’s focus away from their truck and the road.

Having safety meetings at least once a month can be a good way to reinforce your business’s commitment to safe driving habits. You can have individual appointments with your drivers to check in with them and see if they have any suggestions for improving safety. These meetings will keep the risks at the front of everyone’s mind and reinforce how important it is to reduce them as much as possible.

2. Be careful when you’re hiring.

If you’re hiring new tow truck drivers, make sure that you make a good choice. You want someone who has the right qualifications and who understands how important safety is. It’s important to check Motor Vehicle Records (MVRs) of all potential job candidates to make sure that they have a clean driving record and to make sure they have the proper requirements to drive your tow trucks.

3. Have written safety policies.

To make sure that everyone is on the same page as far as safety is concerned, it’s a good idea to have written workplace safety policies for your tow truck business. That way everyone knows what’s expected of them, and they know the consequences of breaking any of the policy’s guidelines. Your policies should emphasize safe driving habits and the importance of staying attentive behind the wheel.

4. Handle small claims on your own.

Since insurance has been such a tricky business lately, you might want to consider handling small losses on your own. Even a minor loss or claim is a strike to your loss history, and you don’t want to give your insurance company any reason to use it against you. The best thing to do is talk to your agent about any loss you face to see whether or not it’s worth filing an insurance claim.

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The tow truck insurance market is tough right now, there’s no denying it. With carriers backing out of the market left and right, it might be hard to find coverage, and once you find it you might realize that the cost is extremely high. All we can do is take measures to lower our risks and sit tight to weather the storm.

If you’re in need of tow truck insurance, we can help. We specialize in transportation insurance and we can help you find the best coverage at the best possible rate. We know that tow truck insurance is crazy right now, so we’ll make it as easy as possible for you. To make sure that you’re protected from all of your risks, we’ll take the time to understand your individual business and its insurance needs. InsuranceHub can help you save money on tow truck insurance, so if your insurance situation is stressing you out, never fear. Get started with your quotes by filling out our quote form or give us a call today.


Porto, Nicolas. “Battling the Rising Cost of Tow Truck Insurance.” Tow

Times, May 2017.