You might be wondering why a handful of insurance carriers aren’t inclined to work with tow truck companies that do repossession work. So many insurance carriers in the United States prefer not to work with repossession companies or instead charge very high premiums. The reason is that if you do repos, you have so much more risk than other ordinary tow truck businesses.

Note there are voluntary repossessions in which the owner understands that their car is going to be taken and allows you to do it. But there are also involuntary repos, where the owner does not want to have their car taken away, and that is not in any way easy.

Indeed, involuntary repossessing cars take a lot of courage and strength. Also there are many risks involved with doing involuntary repos, and those risks make repo dangerous. That is why it is so very important to make sure that your business has adequate insurance coverage to protect you and your finances.

As a repo business in the United States, along with other tow truck coverage, you might want to consider wrongful Repo insurance coverage. This insurance coverage can protect your business if you mistakenly take a car that you are not supposed to.

What is the Cost of Acquiring Wrongful Repossession Insurance?

Have it in mind that the cost of wrongful repossession insurance varies from business to business because every towing operation is different. Generally, a company that has one truck and does 25% repo might pay $10,000 a year for their insurance. However, note that your rate may be lower or higher – this is only an estimate.

Repo insurance is quite expensive because of the risks that your business faces. Depending on what percentage of repo you do, your insurance rates will go up. If you are less than 5% repo, your rates will most likely stay the same. But if you are over 50% repo, you are most likely going to be treated like a company that is exclusively repo.

To ensure that you get an accurate rate for your insurance, you have to check that you are calculating your “repo percentage” correctly. You will have to use the number of jobs that you do, not the total income that you earn from each type of job.

For instance, if you do ten jobs in a month and three of those are repos, your repo percentage would be 30%. Note that insurance companies use the number of jobs instead of the income earned because it provides a more accurate analysis of how much repo you do. In the end, it all comes down to risk.

How to Get Wrongful Repossession Insurance

Acquiring wrongful repossession insurance for your tow truck business although costly can be an inexpensive way to protect against a loss so severe it puts you out of business. If you need a reliable coverage for your wrongful repossession business, below are steps to consider.

1. Know your risks and what you need

There are so many risks a repossession business face daily. Acquiring wrongful repossession insurance should be a cornerstone of your risk management strategy to avoid financial damages if your business is sued.

2. Consider the deductibles

Note that when choosing your insurance policies’ deductibles, think about how much you can comfortably afford to pay out of pocket if you file a claim. Have it in mind that policies with higher deductibles have lower premiums but can cause financial stress during the claims process. Policies with lower deductibles typically charge higher premiums but ensure that you will pay a smaller amount if you file a claim.

3. Overestimate your coverage needs

In the United States, many repo businesses operate on tight budgets, and it can be tempting to buy the minimum insurance coverage to save money. However, keep in mind that lawsuits can cost hundreds of thousands of dollars, so it is safe to have more coverage than you think you will ever need.

4. Carefully read the fine print in your policy and ask questions

Note that less expensive wrongful repossession insurance policies may come with terms such as limited coverage, delayed payouts, or low premiums that increase later. Nonetheless, when acquiring insurance, carefully read the policies to ensure there are no gaps in your coverage so there will be no surprises if you file a claim. If you are unsure about any terms, ask your insurance agent to clarify them before you sign.

3 Companies that Offer Wrongful Repossession Insurance

Have it in mind that not every insurance carrier offers wrongful repossession insurance, so Repossession businesses are expected to go to a top business insurance broker. This way, they can get multiple carriers and compare offers.

1. CoverWallet

CoverWallet is a wonderful choice for auto businesses of all stripes and kinds. The insurance company offers policies that are capable of handling the high dollar value of a thousand cars on a lot, Truck, or even a customer’s injuries after slipping on an oil slick. In addition, CoverWallet allows tow truck owners to easily compare policies online so that they can see how much each insurance carrier charges and weigh the cost against the policy terms.

2. Progressive Commercial

Even though Progressive Commercial has maintained its pace as a leading business auto insurance provider, the carrier also offers several key coverage for tow and impound lots, including garage keepers legal liability, on – hook towing, Wrongful Repossession, and garage insurance.

In addition, tow lot owners who get commercial auto and have general liability or a BOP can earn a discount of up to 15% even if their commercial auto isn’t written through Progressive Commercial.

3. Liberty Mutual

This company is a renowned brand that offers garage insurance policies to Repo companies, auto dismantlers, salvage yards, and “U – Pull – It” companies. The carrier partners with Watson Insurance Agency to bring these hard – to – cover business owners garage liability, commercial auto, general liability, property, and garage keepers insurance.

Also note that policyholders with Liberty Mutual can take advantage of safety resources, including access to a safety consultant, to help minimize claims and keep costs down.

Why Is It Important to Carry Wrongful Repossession Insurance?

Indeed, it might sound a bit off point, but taking the wrong car or a car that you are not supposed to tends to happen more frequently than you think. Your business could end up in deep mess if you make these very simple mistakes…

1. When you fail to call the bank before taking a car

In the United States, it can take a while for a request to repo a car to get from the bank to you. Within that extended time it takes for the request to get approved and arrive in your hands, the owner of the vehicle may have made their payment. So if you don’t check with the bank and repo the car, you might also get in trouble.

2. You accidentally pick up the wrong car

This tends to happen more often than Repo businesses hate to admit. However, you have to check to make sure the vehicle that you are repossessing is the right one to avoid this situation. Indeed a lot of cars look alike and most can even be the same make, model, and colour, meaning that you can end up with the wrong vehicle.

Also note that the owner of owner of the car you wrongly took won’t be happy that you swiped their vehicle by mistake. Make sure to double – check that you are taking the right car.

  1. 3. You don’t have a written notice to take the car

Always note that in the business of car repossessing, a verbal agreement in person or over the phone isn’t enough. You are expected to have the request in writing or you are at risk of getting in trouble for wrongful repo.


Buying insurance to protect your business is not always easy, especially if you don’t know what to look for. Repos are riskier than regular side-of-the-road tows, so that is why your insurance rates might be higher.

When an insurance agent asks what percentage of repo you are, calculate the percentage based on the number of tows you do, not the amount of money you bring in from your various jobs. Insurance companies want to see the number of jobs, not the earnings from those tows, because repos usually pay much better than regular, ordinary tows.

Frequently Asked Questions

  1. What Is Wrongful Repo Insurance?

Wrongful repossession liability insurance coverage will protect you if damages arise out of a negligent act, error, omission, or failure to render professional services. Examples include repossessing the wrong vehicle or failing to obtain a written order from the financing company before towing.

  1. Does A Repo Affect Your Car Insurance?

While it is true that the act of repossession does not affect your insurance company, it will devastate your credit score. Because many auto insurers consider an applicant’s credit score when setting their rates, having a bad credit score will mean higher insurance costs.

  1. How Much Does Repossession Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for repo businesses ranges from $97 to $139 per month based on location, types of repos done, revenue, claims history, and more.

  1. Does A Repo Affect Your Car Insurance?

While it is true that the act of repossession does not affect your insurance company, it will devastate your credit score. Because many auto insurers consider an applicant’s credit score when setting their rates, having a bad credit score will mean higher insurance costs.

  1. What Is A Repossession Affidavit?

A repossession affidavit is a legal statement filed with a department of motor vehicles when a lender repossesses a car. This document informs government authorities that the car has been repossessed and provides details about the action, and it is kept on file with other documents pertaining to the vehicle.

  1. Can The Police Help With Your Car Repossession?

If police are called in during the act of a repossession, their role is strictly to maintain the peace and order, not to help the repossession agent. The repo agent is not even allowed to threaten to call the police in order to help take the car.

  1. Does Liability Insurance Cover Towing?

Towing is usually not covered by liability-only insurance plans. You should expect to pay upfront for any towing, including after an accident. Towing is usually not covered by liability-only insurance plans. You should expect to pay upfront for any towing, including after an accident.

  1. When Is A Repossession Wrongful?

A wrongful repossession is where the consumer is either not in default or has cured the default and the creditor still repossesses the vehicle. Another thing that constitutes a wrongful repossession is when the repossession agent or the creditor breaches the peace in repossessing the vehicle.

  1. What Is Surplus Lines Insurance?

Surplus lines insurance protects against a financial risk that is too high for a regular insurance company to take on. Surplus line insurance can be used by companies or purchased individually. Unlike normal insurance, this insurance can be bought from an insurer not licensed in the insured’s state.

  1. What Does A Repossession Agent Do?

A repossession agent also called a recovery agent or repo man collects property from someone who defaulted on a loan for that piece of property. They then move the item to a secure location while the lender attempts to find a solution with the borrower.

  1. How Do You Insure A Recovery Truck?

A recovery truck can be insured individually, or it can be covered under a motor trade insurance policy. This type of policy covers the vehicle under its own road risk, or it can be covered under a combined motor trade insurance policy, which includes the vehicles and also the premises.

  1. What Is A Repossession Notice?

Also known as a notice of repossession, a repossession notice is a document issued by a lender to a debtor regarding the repossession of property pledged as collateral on a loan. At that point, steps to recover the pledged vehicle will begin, usually with the aid of repossession professionals.

  1. How Can I Lower My Business Insurance Costs?

Here are some ways you can reduce your business insurance cost;

  • Raise your deductible.
  • Cut unnecessary coverage.
  • Look for package deals.
  • Shop around.
  • Reduce your risk.
  • Ask about discounts.
  • Pay in advance
  1. How Do You Become A Repossession Agent?

Step 1: Earn a Commercial Driver’s License.

Step 2: Gain a Repossession License.

Step 3: Secure Insurance and Bond.

Step 4: Train in Skip Tracing.

Step 5: Become a Certified Recovery Agent.

Step 6: Advance with an Independent Business.

  1. What Can You Do If Your Car Was Repossessed By Mistake?

If your car was repossessed by mistake, you should immediately contact a consumer advocacy attorney. Even if the lender or repossession company seems like they’re going to be reasonable, communicating with them through a lawyer will help if you want to pursue legal action.

  1. What Are The Different Kinds Of Repossession Jobs?

Part of the different types of repossession jobs are automobile repossession, boat repossession, equipment repossession, aircraft repossession, and real estate repossession. Repossession jobs can be performed on a freelance basis or while working with an established repossession business.

  1. Do Repo Companies Make Good Money?

While some repo companies pay their agents a weekly salary, the industry average, per car, ranges between $150 and $400. Most repo men are repossessing about four to five vehicles per week, and a trustworthy repo agent who’s at the top of his game can easily clear about $4,000-$6,500 a month.

  1. What Are Typical Repo Fees?

Some agents said that they charge $375 and up for repossessing a vehicle. Agencies typically charge storage fees on a daily basis, which can add up quickly. For companies in Florida, Kansas, and Oregon, their fees ranged between $20 and $50 per day for storage.

  1. How Long Does A Repo Stay On Your Credit?

A repossession takes seven years to come off your credit report. That seven-year countdown starts from the date of the first missed payment that led to the repossession. When you finance a vehicle, the lender owns it until it is completely paid off.

  1. Can I Sue For Wrongful Repossession?

If a car or truck has been wrongfully repossessed, the borrower may have the right to sue the lender and repo agent, even if the borrower missed payments or defaulted in some way.

  1. Can I Sue If My Car Was Repossessed?

If your car-loan lender repossesses your car, van, truck, SUV, or other motor vehicle, they may sue you to recover any money you still owe on the vehicle loan (called the deficiency). If this happens, you’ll need to decide if it is worth paying for an attorney to help you.

  1. Do I Have To Go To Court For Repossession?

Your lender can only take you to court if they complete certain steps, called pre-action requirements. Your lender must: give you clear information about the terms of your agreement and the amount you owe and offer alternative ways of paying to avoid repossessing your home.

  1. How Do You Fight A Repossession?

Here are some options to follow to avoid car repossession;

  • Make Up the Late Payments.
  • Reinstate the Loan.
  • Redeem the Car.
  • Negotiate With the Creditor.
  • Refinance the Car Loan.
  1. What Is The Role Of The Police During A Vehicle Repossession?

The police are there to help keep the peace. If the situation becomes volatile, they should assist in diffusing the confrontation between the repo agent and the borrower. The police are there to protect you and keep anyone from being harmed.

Ajaero Tony Martins