What Are Tow Truck Insurance Requirements?

Thang Truong
Thang Truong
Updated on:

You see tow trucks on the road daily. Whether they’re responding to an accident or someone called for roadside assistance, tow trucks are a big part of the commercial truck landscape. The job of a tow truck driver doesn’t come without risks.

These drivers often operate in busy areas in all kinds of weather. They’ve added a ton or more to their weight when they’re hauling vehicles. Knowing the risks they face, tow truck drivers must have appropriate insurance coverages to protect themselves and the towing companies.

Different states actually have different requirements of the sufficient coverages that tow trucks need to have. We researched and collected all of these requirements for your reference below.

What is minimum 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. We provide the details below. 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.

Any other other tow truck insurance coverage is required?

Yes. But it is complicated that different states may require towing businesses operating in the state to carry different additional coverages and have different minimum coverage limits, in addition to primary liability insurance. We provide the details of these requirements at the state level in the table below.

Before studying the different requirements by state, here are all coverages that towing businesses might need, some of which are required in different states:

  • Auto liability insurance: Like with your private insurance, this policy covers the damage that you, your drivers, or your truck cause to someone else
  • Physical damages insurance: This one covers the damages to the tow truck in the case of an accident. Learn more at the best trucking physical damage insurance companies
  • Uninsured motorists’ insurance: Let’s say someone with little or no insurance causes an accident with your truck; this coverage protects you in that case
  • Medical payments insurance: Coverage for the medical expenses incurred by operators or passengers who are hurt in an accident
  • Workers’ compensation insurance: In many states, tow truck operators are required to provide workers’ compensation insurance if they have at least one employee. Learn more at the best workers comp insurance companies for truckers
  • Garage keepers insurance: This is essential coverage for those who store vehicles at their business. It’s protection if something happens to a client’s car on your lot. Learn more at garage keepers insurance cost and the best garage keepers insurance companies
  • On-hook coverage: This is also sometimes called in-tow insurance. It covers vehicles as the tow company is towing them. 

Tow truck insurance requirements by state

Each state has its own requirements for tow truck insurance coverages. In the following table, you’ll see what kinds of coverages are required and what the minimum coverage limits are required. It’s vital to know that limits for liability and personal injury coverages are also variable by the state. 

State Minimum liability insurance requirementsOther coverages and their minimum limits required 
CaliforniaLiability insurance: $15,000 per person/ $30,000 per accident for bodily injury/ $5,000 for property damagePhysical damage insurance
FloridaCommercial liability:
– Less that 35,000 lbs: $50,000 CSL (Combined single limit)
– 35.000-39,999 lbs: $100,000 
– 40,000 and up: $300,000 CSL
– In tow (on hook) coverage: $50,000
– Storage (tow yard) coverage
– Garage Liability Limit: $300,000 CSL
– Garage Keepers: $50,000 each loss
– Commercial auto personal injury coverage
– PIP (Personal injury protection)$10,000CSL
Texas– Liability coverage
– Incident management:$500,000 per truck per incident
– Private property towing: $300,000 CSL 
– Cargo or cargo on-hook insurance: $50,000
New York– Personal and property liability coverage:
+ $200,000 for injury or death per person
+ $500,000 for injury or death per accident
+ $50,000 property damage per accident
+ $25,000 damage to a vehicle in care, custody, or control of tow company
New Jersey– Mandatory liability coverage: $50,000 per person; $30,000 per accident– Commercial auto liability tow truck coverage
– Workers’ compensation coverage
Georgia– Commercial auto liability insurance: $100,000 bodily injury each occurrence/ $300,000 bodily injury each accident/ $50,000 property damage– Garage Keepers: $50,000
Illinois– Combined single limit liability coverage: $500,000 CSL
– Under contro of ICC: $750,000 CSL
– Car on-hook coverage: $25,000
– Garage liability: Minimum of $500,000 CSL
Pennsylvania– Liability insurance: $200,000 per injury; $500,000 per incident; $50,000 per property damage claim– Garage keeper’s legal liability insurance: $100,000
Ohio– Liability insurance: $15,000/ $30,000– Workers’ compensation insurance
Massachusetts– Liability insurance: $20,000 per person/ $40,000 per accident for bodily injury/ $5,000 property damage– Workers’ compensation insurance
– Personal injury protection (PIP)
– Uninsured motorist (UM)
VirginiaLiability insurance (limits depend on the use of the truck)
– For hire: $750,000 bodily injury and property damage for 10,000 pounds and up
+ $300,000 bodily injury and property damage for 7,500 to 10,000 pounds
– Private: $70,000 bodily injury and property damage
– Cargo insurance: For hire: $50,000
Louisiana– Automobile liability coverage: $300,000 CSL– Workers’ compensation and employer’s liability
– Garage keeper’s legal liability: $50,000
– Garage liability insurance$50,000
– On-hook coverage$25,000
Michigan– Mandatory no-fault insurance, including Personal Injury Protection, Property Protection Insurance, and Residual Liability Insurance
– $750,000-$5 million depending on use
AlabamaCommercial auto liability insurance (limits depend on the size of the truck)
– Class A (light duty): $300,000 CSL
– Class B (Medium duty): $500,000 CSL
– Class C (Heavy duty): $750,000
On-hook coverage
– Class A: $75,000
– Class B: $100,000
– Class C: $150,000
– Class A: $100k
– Class B: $200,00
– Class C: $200,000
Maryland– Commercial liability insurance: $30,000 per person, $60,000 per accident, $15,000 for property damage– Uninsured motorist
ColoradoCombined single limit motor vehicle liability coverage: $750,000– Cargo liability coverage
– Garage keeper’s liability
NevadaCombined single limit liability coverage: $25,000 per person bodily injury/$50,000 per accident/ $20,000 property damage– Garage liability or commercial auto: $95,000
Arizona– Financial responsibility, also known as motor vehicle liability: $25,000 per person/ $50,000 per accident/ $15,000 for property damage
WashingtonMotor vehicle liability: $100,000– Garage keepers coverage: $50,000
– On-hook or cargo coverage: $50,000
North CarolinaLiability insurance: $750,000
South CarolinaLiability insurance: $25,000/ $50,000/ $25,000– Worker’s compensation with four or more employees
– Uninsured motorist (UM)

What is tow truck insurance?

Tow truck insurance is commercial auto insurance that is designed for those in the towing industry. There are federal regulations for minimum insurance requirements for operating a tow truck. It’s essential to understand those if you travel beyond the borders of your home state. 

Each state has its own regulations for the minimum tow truck insurance requirements. At a minimum, tow truck operators are required to have some form of liability insurance. Individual states determine the limits on those policies.

How much does tow truck insurance cost?

The average tow truck insurance cost is $448 per month or $5,376 a year. Tow truck insurance cost varies significantly depending on several factors.

This is just the national average. Your quotes and rates will be different. Be sure to shop around with a few companies or work with top broker like Simply Business or Commercialinsurance.net to get and compare several quotes to find the cheapest one for you towing business. You can also try to get a tow truck insurance quote online on Progressive website. Progressive is the only carrier offering quotes online. It shouldn’t take you more than 10 minutes to get a quote.

Learn more about the details of tow truck insurance cost.

Who needs tow truck insurance? 

A tow truck is a tow truck, right? Not exactly. Different towing operations require different licensing and often different insurance coverages. 

Basically, you can group tow trucks by the jobs they do. A mechanic often has a tow truck to facilitate towing cars to his (or her) shop to be repaired. Typically, that use is only for the surface city streets. 

Then, you have the trucks that pick up cars on the highways. Even car haulers are a form of tow truck. Those companies are usually required to obtain special licenses due to the risk involved in operating on such busy roadways. 

Finally (for our purposes), there are the private tow trucks. Those trucks are used for personal activities. Vehicle collectors or small car dealers typically own them.

Anyone who operates a tow truck must maintain at least the minimum liability tow truck insurance requirements. Many states will revoke towing rights if you don’t carry appropriate insurance coverage.  

Best tow truck insurance companies

Many insurance companies offer tow truck insurance. We have done the research and here are our recommendations of the best tow truck insurance companies.

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

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