As we all know, insuring a commercial vehicle is by no means cheap. Therefore, by working with a company that specializes in insurance for towing businesses, you can get the best rates. Not only that, but you can get expert advice on how you can better manage risk and keep your insurance costs down.
In this article, we’ll expand on the cost of tow truck insurance and share with you the various factors that can affect your rates. Let’s get started.
How Much is Tow Truck Insurance?
In 2020, the national average for tow truck insurance was around $450 per month. This amount would be if you did basic towing and recovery. We’ll expand on this more below, but the type of towing you participate in will affect your rates.
If your business does towing for an auto body shop you can expect to pay around $625 a month. Doing repo work can cost you around $830 per month. Lastly, since roadside assistance tends to be riskier, your average monthly payment will be around $960.
This is where an insurance agent comes into play. They’ll tailor your policy to fit your needs and work with your budget, all while giving you the best coverage possible.
What Affects the Cost of Tow Truck Insurance?
Like any other insurance, the rates for your tow trucks are impacted by many factors. One of these includes the location of your towing business and where you operate. For example, a business that’s operating in a densely populated area with lots of traffic will be more susceptible to accidents or other damage. Therefore, operating in more congested areas will require you to pay more for insurance
Your Hours and the Type of Towing You Do
Your rates are also affected by your hours of operation. If your tow trucks provide 24/7 roadside assistance then you can expect to pay more for insurance. This is because night towing is a lot riskier than during the day. You’re more susceptible to an accident or hitting wildlife since your visibility is significantly reduced.
The type of business you do can also increase your rates. If you do repo work you may have to deal with angry people and there’s always the chance you tow the wrong car. Therefore, you should carefully consider what type of towing you want to do.
Drivers with a bad safety rating will cause your rates to skyrocket. Therefore, it’s important for towing businesses to only hire drivers with a clean driving record. This not only drives your premiums down, but it also promotes a safe work environment. With fewer accidents and claims, your insurance company will thank you.
Moreover, the number of drivers you have working for you will affect your tow truck insurance costs. The more drivers you have, the more you’ll pay.