5 Best Tow Truck Insurance in Texas for 2023

Thang Truong
Thang Truong
Updated on:

No matter where you are in the US, if you own and operate a tow truck, or if you operate a towing company, you need quality insurance. This guide strives to help you know how tow truck insurance works, what the insurance covers, and how much tow truck insurance costs in Texas. We will also discuss the 5 best tow truck insurance companies in Texas. 

5 best tow truck insurance companies in Texas

We decided to take some of the legwork out of searching for insurance for you by researching, and reviewing 5 of the best tow truck companies in Texas. We got a quote from both biBERK and Progressive.

biBERK: Best for low-cost tow truck insurance

biBERK is a business insurance company that is a division of Berkshire Hathaway. biBERK only focuses on small business insurance. In addition to commercial truck insurance, they also provide workers comp insurance, general liability insurance, professional liability insurance, Business Owners Policy, and other business insurance coverages. So biBERK can bundle your tow truck insurance with other business policies and offer discounts.

biBERK’s specialty is simple, straightforward insurance coverage for those with straightforward insurance needs and they specialize in selling business insurance directly to small business owners, bypassing agents and brokers. With their direct distribution, they can cut costs and reduce premiums for small business owners. In fact, they claim that they can save up to 20% on premiums for their small business customers.

We requested a quote from biBERK for a tow truck company with a single truck and an owner-operator driver. After completing their questionnaire, they returned a quote for us. Their quote is based on a 12-month coverage, but the amount given is for one month. This particular quote includes liability and physical damage coverages.

Keep in mind that your quotes and rates will be different.

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Progressive: Best Overall

Progressive is well known for its auto insurance policies and several discounts. You may not know that they have commercial truck insurance coverage too. As a matter of fact, they are the top commercial truck insurer in the country.

We took the liberty of getting a quote from Progressive for a one-truck tow truck operation with an owner-operator for the driver. You’ll see that we were quoted a yearly rate. However, they do offer payment plans that break the rate down into more manageable chunks. They also allow you to choose between annual and six-month coverage plans. This particular quote was for liability only, which is different from the biBERK’s quote above, which is for liability only.

Keep in mind that your quotes and rates will be different. Make sure you get several quotes from the companies that we recommend to compare them.

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THREE: Best for simple and easy-to-understand policies

Another Berkshire Hathaway insurance company, THREE, strives to provide simple policies that are easy to understand. Its mission is to provide all the coverage small-business owners need in a single, three-page policy. The three-page policy is the inspiration for the company name. 

Unlike many other business insurance companies, THREE includes typical business owner’s policy coverages with commercial auto, cybersecurity, and workers’ compensation policies as one bundle. Even if you choose to bundle all coverages into one policy, the policy document is still 3-page long only.

THREE also offers quotes online. Their quotes include commercial auto, BOP, cybersecurity, and workers comp insurance in one policy. Of course, you can choose to buy only the coverages that you need. The quote process should take only 5-10 minutes.

Simply Business: Best for comparing several quotes

Simply Business is a broker that does the initial legwork to find quotes tailored to the line of business you’re in. After submitting a quote request, Simply Business will provide you with 3 quotes to compare and select the best and the cheapest one for your towing business. Towing business is quite complicated. In some cases, Simply Business may need to call you to discuss your quote options instead of providing them online.

Simply Business is owned by Travelers insurance which is the second largest writer of business insurance policies in the US. They is also known for great customer satisfaction rating. They earn a rating of 4.1 out of 5 on Trustpilot.

Commercialinsurance.net: Best for niche towing businesses

Commercialinsurance.net is a national insurance broker specializing in finding coverage for small businesses. Most of the businesses they work with have an annual revenue of less than $100 million. The company prides itself in working with small companies and focusing on specific industries. One of those industries is trucking. 

Commercialinsurance.net works with a network of knowledgeable insurance agents to find the right quotes for you. They have agents that represent over 50 trucking insurance companies and who specialize in helping people in the industry get the appropriate insurance for them. 

If your towing business is quite unique, you can count on commercialinsurance.net connecting you with an agent knowledgeable about your specific situation. If you have difficulties getting coverage for your towing business, you should definitely work with them.

How does tow truck insurance work?

If you own a tow truck and use it while operating your business, you need tow truck insurance. This applies to owner-operators with one truck all the way to a large fleet of trucks. The business owner is responsible for purchasing tow truck insurance coverage even if they don’t drive the truck themselves. It’s important to have coverages that will effectively cover the truck and protect the business.

The business owner and the insurance company should work together to find the appropriate coverage limits, deductibles, and kinds of coverage. Don’t forget to cover the truck driver!

What does tow truck insurance cover?

Tow truck insurance is very much like your regular automobile insurance policy, with a few specialized coverages available. Some of the standard coverages you will find include:

  • Liability insurance
  • Uninsured/underinsured motorist
  • Collision
  • Comprehensive
  • Medical payments

Coverages specific to tow trucks include:

What are the tow truck insurance requirements in Texas?

If you run a towing business or drive your tow truck as an owner operator in Texas, you know that tow truck insurance is legally required in Texas. You must have tow truck insurance coverage to obtain the license to drive a tow truck for business in Texas. Below are the details:

  • For Incident Management Towing:
    • a minimum of $500,000 liability insurance per tow truck per incident, which is combined single limit liability for bodily injury to or death of an individual per occurrence, loss or damage (excluding cargo) per occurrence, or both; and
    • a minimum of $50,000 of cargo or cargo on hook insurance per tow truck per incident.
  • For Private Property Towing:
    • a minimum of $300,000 of liability insurance per tow truck per incident, which is combined single limit liability for bodily injury to or death of an individual per occurrence, loss or damage (excluding cargo) per occurrence, or both; and
    • a minimum of $50,000 of cargo or cargo on hook insurance per tow truck per incident.
  • For Consent Towing:
    • A minimum of $300,000 of liability insurance per tow truck per incident, which is combined single limit liability for bodily injury to or death of an individual per occurrence, loss or damage (excluding cargo or cargo on hook) per occurrence, or both

Lastly, Insurance covering permitted tow trucks in Texas must be kept in full force and effect at all times.

How much does tow truck insurance cost in Texas?

Tow truck insurance can cost as low as $97, for liability coverage only. The average liability-only tow truck insurance in Texas is $380 per month, or $4,560 per year. The comprehensive tow truck insurance with other coverages such as liability, bobtail, physical damage, and cargo insurance is more expensive.

The average cost of a comprehensive tow truck insurance policy in Texas is $950 per month or $11,400 per year with the following average cost breakdown for each coverage:

Tow truck insurance coveragesAverage costs in Texas
Liability $380 per month
Bobtail $40 per month
Physical damage $350 per month
Cargo $180 per month

These are just the averages. Your rate will be different. Be sure to shop around to compare several quotes before making your final decision. Here are some of the ways that can help you compare several quotes more efficiently:

  • Getting quotes online from Progressive, biBERK, THREE, or InsurePro.
    Work with a top broker like Simply Business or Commercialinsurance.net to get and compare several quotes in one place.

Learn more at how much tow truck insurance costs

What factors affect tow truck insurance cost in Texas?

Tow truck insurance cost varies depending on several factors. Here are some of the main factors: how many trucks you have, how far you drive, the kind of towing you do, and driving records of the drivers on your payroll, your company’s experience, and your company’s insurance and claim history, etc.

There may be other factors depending on the company you choose. Speaking with an insurance agent and comparing quotes is the best way to determine the cost and find the most affordable coverage for yourself. 

How to save money on tow truck insurance in Texas

Tow truck insurance can be a significant expense, but you can save some money on the coverages. Here are a few ideas on how to do that. 

  • Consider enrolling in the insurance company’s safe-driving program. Most insurance companies offer them, and they are typically an app or other device that monitors driving. 
  • Maintain your trucks regularly. Well maintained trucks are less likely to break down or give you issues on the road. 
  • Hire drivers with clean driving records. Better driving records typically garner better insurance rates. Experienced drivers are more likely to get better rates as well. 
  • Compare rates to get the best ones. There is no shame in shopping for the best insurance rates you can get. You don’t have to choose the first quote you’re offered. 

Final thoughts

Anyone who owns and operates a tow truck business needs to have tow truck insurance. The coverage isn’t one-size-fits-all; you should find a company willing to customize your policy to fit your business needs.

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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