How Much Does Tow Truck Insurance Cost? (2023 Rates)

Thang Truong
Thang Truong
Updated on:

Tow truck insurance is a type of commercial truck insurance that must be customized based on a few factors. A good insurance company will know exactly how to assess your towing company’s needs and assist you with finding the appropriate policy for your business. 

How much does tow truck insurance cost?

Premiums for tow truck insurance vary depending on several factors. Nationally, the average for tow truck premiums is approximately $448 monthly. This is just for the primary trucking liability coverage. And it is just the average. Insurance could cost more or less than that depending on the insurance company as well as factors that affect rates for individual businesses. Below are a few coverages a tow truck business might need and their average monthly costs:

Tow truck insurance coverages Monthly average costs
Primary liability coverage $448 per month
Non-trucking liability coverage $41 per month
Physical damage$183 per month
Trucking general liability coverage$52 per month
Workers comp coverage for truckers$242 per month

Above are the average costs of tow truck insurance, not necessary your own cost. Different insurance companies will also give you different quotes. Be sure to shop around with a few companies to compare quotes. Shopping with a broker like Simply Business, or Smart Financial is a convenient way to compare several quotes. You can also get a quote online directly from carriers. However, Progressive is the only carrier offering tow truck insurance online. It shouldn’t take you more than 10 minutes to get a quote on their website, so it may be worth the try.

How much is the average tow truck insurance cost per month?

As we learn above, the average tow truck insurance cost is $448 per month. However, that is just for trucking primary liability coverage, which is required by all state and federal regulations. If you add additional coverages that a towing business would need, the average comprehensive tow truck insurance policy costs $1,198 per month. This would include primary liability, non-trucking liability, trucking general liability, trucking physical damage coverage, and workers comp insurance for the truckers.

Tow truck insurance policy typesAverage costs per month
Trucking primary liability only (required) $448 per month
Comprehensive coverage, everything included $724 per month
Comprehensive trucking coverage, plus workers comp for truckers$966 per month

What factors affect tow truck insurance premiums?

Like with personal automobile insurance, a variety of factors affect the premiums associated with commercial truck insurance. With tow truck insurance, there are additional things that factor into the policy premiums even beyond commercial insurance rules. 

Your location

The location where you operate your towing business plays a key role in the rates you will pay for insurance. Rural areas are typically less expensive than cities, for example. Areas that are statistically accident prone may also have higher rates as will areas that have severe weather like tornadoes and hurricanes. 

Business hours

Some towing companies operate within normal business hours while others are willing to run 24/7 emergency services. The hours you operate your business can affect your insurance rates. Those who run after hours often incur more expensive rates. 

Number of drivers and their driving records

More drivers tend to lead to higher rates. The driving records of your drivers will also affect rates. Hiring experienced drivers with good driving records helps to keep your rates lower than hiring inexperienced drivers or those with poor driving records. 

Type and number of tow trucks

A larger fleet of trucks is more expensive than a smaller one. The kind of truck you have also makes a difference. Rates are different for flat-bed trucks and those with traditional tow trucks. 

Age of trucks in your fleet

This is one area where age may be a benefit instead of a detriment. Typically older trucks require less to insure. This is primarily because as they age they become less valuable overall. 

The type of towing you do

Tow truck companies who tow for accidents face different premiums than those who tow for heavy equipment transport. Roadside assistance companies also have a different premium rate.

How long you’ve been in business

A new towing business will likely have higher rates than one that is well-established. It simply takes time to establish safety rankings. A more well-known towing company with established good driving and safety records will likely have lower rates.

How much tow truck insurance do I need?

These are the current federal minimums for commercial truck insurance:

  • Non-hazardous freight moved in a vehicle weighing under 10,000 lbs.: $300,000
  • Non-hazardous freight in a vehicle over 10,000 pounds: $750,000
  • Oil moved by For Hire and private carriers: $1,000,000
  • Other hazardous material moved by For Hire and private carriers: $5,000,000

States have their own requirements, so check with your state to find out what you need. 

If part of your business involves repossession work, you’ll pay more for insurance, due to the dangerous nature of repossessing someone else’s car. 

Tow truck insurance is expensive. Be sure to shop around with a few companies or work with a top broker like Simply Business or to compare several quotes to find the cheapest one. You can get a fast quote online to start the process. Progressive is the only carrier offering quotes online. It shouldn’t take you more than 10 minutes to get a tow truck insurance quote on their website, so it may be worth a quick try.

Ways to save money on tow truck insurance

Another commonality between personal automobile insurance and commercial insurance is that companies offer ways to save money with discounts. This is true for tow truck insurance as well. Bundling your towing policy with other business policies is one way to save money on your premiums. Here are some other ways to save

Keep accurate driving logs

Many commercial trucking businesses are required to keep records of runs. If your towing company keeps these kinds of records, make sure they are accurate. Should there be a mishap of any kind accurate records can keep your insurance premiums from increasing, if not save your coverage entirely.

Keep up with routine maintenance

A well-maintained vehicle is less likely to have issues when you’re on a job. This will help to prevent claims against the liability portion of your insurance which in turn will help you save money on premiums. 

Keep a good credit score

Many people don’t realize that insurance companies check your credit score before they decide whether to write you a policy or not. Maintaining a good credit score will help you get insurance, and it will also help you keep your premiums lower. 

Keep a good driving record 

As with personal automobile insurance, your driving record can greatly affect the rates you pay for your insurance. Those with good records will pay less for their insurance. All the drivers in your company need to maintain good records because their records can also affect your insurance premiums. Having a crew of drivers with good driving records indicates that you are experienced on the road and therefore your insurance premiums will reflect that. 

Learn more at how to find cheap tow truck insurance

Top tow truck insurance companies

Shopping for commercial truck insurance is much like shopping for any other insurance. To be sure you’re getting the best coverage for your money it’s best to compare the amount of coverage as well as the cost of coverage. Here are the top three tow truck insurance companies that we found. 

  • Simply Business
  • Progressive
  • Liberty Mutual

Simply Business

If you want to compare online quotes, Simply Business is the best way to do that. This is an insurtech company that allows you to check multiple quotes simply by inputting your information once.  They can provide you with multiple quotes to compare because they partner with multiple insurance companies. 

You can also consider the other brokers in our picks of the top commercial truck insurance brokers


We found Progressive to be the best overall for commercial insurance coverage. They can also write policies for other business coverage. They have a program called the Smart Haul Program that gives them immediate access to driving data. If you enroll in this program you can save up to 5% on your insurance coverage. 

Progress is also the only carrier offering tow truck insurance quotes online. It is not very easy to get a commercial truck quotes online. Learn more where to get commercial truck insurance quotes

The Hartford

The customer service with the Hartford can’t be beaten. They offer a specialized and customized program specifically for towing companies. They have been around for more than 200 years and have insured more than 1 million business customers, including trucking companies. They are proud to be one of the most ethical companies in the world. They don’t offer commercial quotes online, so you will have to call them to get a quote.

Learn more at the best tow truck insurance companies

What does tow truck insurance cover?

Below are the main tow truck insurance coverages:

Bodily injury liability

This covers you if the tow truck driver causes injuries to another person or people in an at-fault accident. The amount of coverage that is required varies from state to state, but every state requires some bodily injury coverage. 

Property damage liability

This covers you for physical damages to someone else’s property, but not any cars you may be towing. For that, you need on-hook towing coverage.

On-hook towing coverage

On-hook towing coverage provides protection for damages that occur to a vehicle while it’s being towed. It covers damages due to fire, collision, theft, or vandalism. However, it does not apply to any vehicles you own (personal or owed by the company). In other words, you can’t collect if you damage your personal vehicle while you’re towing it somewhere. 

Motor truck cargo coverage

Some insurance companies make a distinction between hook and chain tow trucks and flatbed tow trucks. Motor truck cargo coverage is the equivalent of on-hook towing coverage, but for a flatbed tow truck. 

Garage keepers liability: 

This is required for towing businesses in some states: in other states it’s optional. Garage keepers liability provides coverage for someone else’s property (i.e. their car) while it’s being stored in your garage. Learn more at the best garage keepers insurance companies and the best garage liability insurance companies.

Wrongful repossession coverage

This covers tow truck companies if they accidentally repossess the wrong car, or a car mistakenly reported to your company. It also protects you from lawsuits and physical injury if someone becomes violent while you’re repossessing their car. 

Other coverages a tow truck company may need

In addition to the main coverages above, a tow truck company may need other related coverages as well:

Workers comp insurance for truckers

If you hire drivers as full-time employees, you are required by laws to provide them with workers comp insurance. Workers comp insurance protects employees when they are injured or become ill while being at work. It pays for the medical costs, lost wages, disability benefits, or even death benefits if employees are injured at work. Learn more at the best workers comp insurance for truckers.

Occupational accident insurance for truckers

Most drivers of tow truck companies are hired as independent contractors. By laws, tow truck companies are not required to provide workers comp insurance for independent contractors. However, trucking is a high-risk business. The chance for your drivers to get injured is significantly higher than other industries. Many tow truck companies choose to provide their drivers with occupational accident coverage. Occupational accident insurance is a lighter form, or less comprehensive, of workers comp insurance. It is usually half of the price of workers comp insurance. Owner operator truckers usually buy this coverage to protect themselves as well. Learn more at the best occupational accident insurance for truckers.

Trucking general liability insurance

Another increasing popular coverage for tow truck companies is trucking general liability. This protects tow truck companies from lawsuits by their customers if they have bodily injuries or property damages caused by the operations of the tow truck companies. If their customers are injured in the garage of tow truck companies and decide to use, trucking general liability insurance will protect tow truck companies from such a lawsuit. Learn more at the best trucking general liability insurance companies.

Learn more about tow truck insurance requirements in different states

Commercial tow truck insurance requirements

Tow truck insurance is a subcategory of commercial truck insurance. All towing companies are required to have at least primary liability insurance. Different states have different coverage limit requirements. The standard limit requirement is $300,000 CSL, ie. combined single limit.

If a tow truck driver operates his towing business beyond the border of a state, he needs to have liability coverage minimum required by federal laws. The standard federal liability limit requirement for commercial trucks in general is $750,000 CSL.

Learn more at what are tow truck insurance requirements?

Final thoughts

Tow truck companies need insurance designed for their specific needs. Several factors affect the cost of premiums. Comparison shop to get the best rates based on your circumstances.

Thang Truong
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, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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