Working with an insurance company that has experience providing insurance for towing businesses will not only manage the risks that are specific to their business but can help in getting the best rates for premiums. A professional, licensed insurance agent with experience in commercial towing insurance understands that towing insurance should be customized to cover the particular risks connected with each business. By comparing insurance policies, you can be confident that you are getting the best rates and paying only for the coverage your business needs.
Premium Cost Specifics
In 2020, the national average monthly cost for basic tow truck insurance was approximately $450 for a single used truck used for towing recovery and roadside assistance, with an average price of $97 to $159 per month for a standard general liability policy that covers basic requirements. Your insurance agent should be able to help tailor a policy that meets the state-required minimum coverage and suits your small business truck towing needs.
The premium costs will depend on a variety of factors, including the specific nature of your business. For instance, if your business is an automotive repair or auto body shop that operates a tow truck to support your primary repair business, the average basic premium cost is around $7,500 per year, per truck. However, if your tow truck provides repossession services, the average premium cost increases to $10,000 per truck due to the additional risks faced by these businesses.
These average premium expenses are established on nationwide statistics, and they might not accurately depict what you should anticipate to reimburse for the identical coverage. Your expenses will differ depending on your operational hazards and business requirements, among other considerations.
Factors That Affect Tow Truck Insurance Premium Costs
As with any type of insurance coverage, premium rates for tow truck insurance are calculated based on several rating factors. The factors that will help determine your rates include:
Business Location and Area of Operation
Being situated in a densely populated urban area with heavy traffic volumes and a higher number of accidents than the national average, a business may experience an increase in premium rates compared to those operating in less congested areas.
Emergency Hours of Operation
If your tow truck(s) offers emergency, round-the-clock roadside assistance, your premiums will be higher than those of a company that operates solely during regular business hours.
Type of Towing and Type of Tow Trucks
Insuring heavy-duty tow trucks incurs a higher cost compared to light-duty trucks. Additionally, the type of truck, whether it is an underlift wrecker or a rollback carrier, also affects the insurance expenses. Consequently, larger and pricier trucks will result in higher insurance costs.
Number of Drivers and Their Driving Safety Records
If you have fewer drivers, you will end up paying higher premiums compared to having multiple drivers. It is advisable to employ skilled drivers with good safety records in order to maintain lower premium costs. The safety records of your drivers will also impact your premium expenses.
Age and Number of Trucks in Your Fleet
Older model tow trucks generally have lower value and, consequently, may be less expensive to insure. Furthermore, the number and ages of the trucks under your possession and usage will impact the amount you pay for insurance.
Length of Time in Business
If you have been in business long enough to establish a safe operation record, you may be able to demonstrate the ability to manage towing responsibly and safely, thus decreasing your business’s premium costs. However, if you are just starting a towing operation, you may have to pay higher premiums.
Your Company’s Safety Program Implementation
Your company may need to adhere to different safety measures in order to comply with relevant state and federal legislation. The safety initiatives you choose to implement will impact the rates of your insurance premiums.
Other Coverage
In addition to basic tow truck insurance, your business may require additional types of coverage. The premium costs for those additional policies are based on many variances and will require the skill and knowledge of an experienced agent for approximate costs. The other types of coverage that many tow companies need typically include:
Workers Compensation
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Garage Keepers Insurance
This policy covers fire, theft, vandalism, and collisions caused by losses to the facility where customers or trucks are stored, protecting against such incidents.
On-hook Insurance
If your customer’s vehicle is damaged, this coverage provides assistance for the costs of repair. It also includes protection for damages from fire, theft, explosions, vandalism, and collision.
If you need help redesigning your existing coverage, you can talk to an Insurance Pro agent who can provide a competitive quote. If you are an established towing company, you can contact the experts at Group Insurance Pro for a consultation about the different types of insurance policies that meet your towing business needs. You can call them at 0770-619 833 or reach out to them online.