If you are in the business of towing or hauling vehicles for others, then have it in mind that a lot of unforeseen incidents can happen while out on the road. It falls on you to always look into ways to guarantee the safety of your business, especially with client’s cars while they are in your possession.

What is On-Hook Insurance?

On – hook insurance helps to cover your client’s car while it is hooked up to your tow truck. Tow truck and wrecker companies require on-hook insurance because anything can happen on the road. And while you might have other business insurances to protect your tow truck from disaster, that insurance does not always extend to the car hooked up to your rollback or wrecker.

On – hook towing insurance more or less helps to pay for the repairs or even replacement of a damaged vehicle that you are towing but do not own, if it is damaged while it is being towed by causes such as collision, fire, theft, vandalism, or an explosion.

As a tow truck business owner, having this insurance in place will help ensure that your business is protected from any lawsuits or damage claims if a third – party vehicle is damaged during hauling or towing. Without this insurance, it can get quite expensive to repair or replace the vehicle from your own funds if disasters occur.

On – hook coverage pays for all the damages or replacement, as the case may be. With on-hook coverage, the client chooses both the limit and the deductible. This limit is usually the maximum amount that can be paid per time when a third – party vehicle is damaged while towing.

Your deductible amount represents the amount that you as the owner of the business will pay towards the repairs or replacement of the damaged vehicle before your insurance company comes into the picture and pays you. If you pay up, you will likely be reimbursed by your insurance company after all the processes have been met.

What is the Maximum Limit for On-Hook Insurance?

Also note that the maximum limit for on-hook coverage can be anywhere around $10,000 – 250,000. However, if your business tows only vehicles of low value, a limit of $10,000 is adequate. Nonetheless, the higher the value of the vehicles, the higher the limit, but the higher the limit, the more premium you pay.

It is very advisable to consider all factors and strike a balance between them based on the facts available. It is also ideal to have a limit of medium value as you won’t end up paying extra from your own pocket in case unanticipated expenses comes up.

Also note that to be able to acquire or be eligible for on – hook towing insurance, towing business owners are expected to have earlier acquired liability insurance (an insurance policy that pays for damage done to third parties by you).

However, it is imperative to note that if one of the vehicles in the towing business is insured with a particular limit and deductible, all the vehicles in the fleet will be insured at the same limit.

How Much It Cost to Get On-Hook Towing Insurance Coverage

Generally, on – hook towing insurance coverage tends to be bundled with your business auto liability insurance; or rather it makes up quite a significant part of it. On average, monthly premiums for the whole bundle can be anywhere between $350 – 800. Different factors contribute to the final cost of your on – hook towing insurance coverage. Some details that an insurance company will look at include:

  1. Your drivers: The age, experience, and driving records of your tow truck drivers can affect your insurance rates.
  2. Claims/losses: Note that if your business has a history of claims or losses, you could be seen as more of a risk. And that means you could have higher insurance rates.
  3. Speeding tickets: Like claims, speeding tickets are seen as indicators of risk.
  4. What you typically tow or transport: The price of on – hook or in – tow insurance depends on what type of vehicle – new, used, disabled, scrap – that you usually haul.
  5. Your location/Radius of operation: Where you tow and how far you go can affect your rates.
  6. How long you’ve been in business: A more established business with a good loss record may have lower insurance rates than a new venture.

Also remember that every business is different and the only way to get an accurate idea of how much your on – hook towing insurance coverage will cost is to get a quote.

How to Get an On-Hook Towing Insurance Coverage in 7 Steps

Note that you might be required to carry a certain amount of on – hook towing insurance coverage in order to run your business, and this requirement tend to vary from state to state. So it is imperative to check what it is in your state and the various requirements you ought to meet. Here are few steps to consider when you want to acquire on-hook towing insurance coverage in the United States.

1. Start Shopping On Time

You don’t have to wait for the next year or for your business to gain a little ground before you start considering this insurance for your Tow Truck company. You should give your agent at least 60 days to compare policies and get you the best towing insurance company possible.

2. Compare Several Towing Insurance Companies at Once

Have it in mind there is no single best insurance company—what’s right for someone else might not be right for you. So how do you find the one that fits you? You simply cast a wide net. Don’t just contact one insurance agency, contact multiple ones. Always remember that you can fill out a single form and get immediately connected with three different agents online.

3. Give Your Agents All the Facts About Your Business

When talking to an agent, note there are some questions that you have to answer. It is pertinent to be as honest and detailed as possible so he can locate and provide you with a policy that best suits your needs. Information you should have ready:

  1. The exact size of your fleet
  2. Information about your vehicles, including make, model, and mileage
  3. What state and federal safety programs and security measures you employ
  4. Your driver qualification files
  5. The last three to five years of your loss run history
  6. The services offered by your business and the amount of revenue each generates

4. Find the Company’s Credit Rating

Note that after the agent must have analyzed and processed your information, he’ll provide you a specific quote from an insurance company. You should accept or decline the offer based primarily on two things: the price and the reliability of the insurance company.

5. Get all the info about the company you need

Also note there are some basic questions to ask your insurance company to make sure they can accommodate you and your business. Some good questions to ask include

  1. Can I cancel my policy at any time without any fees?
  2. What kind of repairs do you offer—OEM or otherwise?
  3. Do you offer combined deductible?
  4. When can I reach you if issues occur? Do you have 24 – hour claims service?

6. Get the Best Price

You should also find out which discounts are available. Companies have numerous discounts for businesses based on safe business practices. Note that you might be able to get a discount if you offer safety manuals and employee handbooks, your drivers use GPS systems, or you have security cameras installed on your property.

7. Use a payment plan that matches your budget

Indeed there are various types of payment plans available, including month-to-month payments, year-to-year payments, and everything in between. However, note that the more you pay upfront and the more spaced out your payments are, the less your overall premium will cost.


As a tow truck driver, you’ve got a lot of responsibility. Your client trusts you to get their car from Point A to Point B without incident – they expect that vehicle to be in the same condition as they left it. Indeed this puts a lot of pressure on you to take good care of the car. Acquiring and having On – hook insurance can help protect your business from a big financial loss.