Do You Need a Commercial Tow Truck Insurance for Your Business? Reasons You Should Learn More About Coverages - Strong Tie Insurance Services

Do You Need a Commercial Tow Truck Insurance for Your Business? Reasons You Should Learn More About Coverages

Strong Tie Insurance October 11, 2021 Our Blog

There are plenty of coverages commercial truck insurance, California can offer. Choosing what plan and which coverages you need to include can be difficult without knowing what types of coverage exist, and what they do to protect tow truck companies.

What is Commercial Tow Truck Insurance?

Tow trucks transport vehicles, which may or may not be carrying a rider or personal belongings. This unique situation exposes tow trucks to special risks and hazards on and off the road.

Hence, commercial tow truck insurance protects the customer’s vehicle and belongings, as well as the driver and the truck.

Who Needs a Commercial Tow Truck Insurance?

Any trucking company that transports or tows vehicles will need tow truck insurance.

Examples of such businesses are roadside service providers, auto body shops, auto mechanical repair shops, auto salvage, and auction haulers, and auto club contractors. 

Why Do You Need Tow Truck Insurance?

There are two main reasons why businesses need tow truck insurance. The first is for legal compliance and the second is for financial protection.

Without certain coverage, like liability or commercial auto insurance, your truck is not even allowed to run on the road, much less operate for business purposes.

More importantly, tow trucks have several risks which insurance needs to cover so that you can protect yourself and assure your customers of their safety. Not only is the truck and its driver at risk, so is the vehicle being towed.

Its owner often rides along with their vehicle, and their personal belongings which are left inside their vehicle.

Why You Should Learn More About Coverages?

With plenty of insurance plans in the market, finding the right fit for your needs can be challenging unless you know about coverages.

Check out the four reasons listed below on why you should learn more about coverages.

1. Not all automotive insurance plans are the same

Insurance plans vary depending on the type of coverage, its limit, premium, and deductions. There is no one size fits all insurance policy for your trucking business.

2. Your insurance coverage depends on the nature of your business

When choosing an insurance plan, know what coverages mean—so you can decide which of them will best protect your business.

This knowledge helps you decide which coverage suits you best and should help you select an insurance plan to spend your precious money on.

3. Knowing about insurance coverages helps prevent over or underinsuring

Understanding what insurance coverages mean would help you select the right limit, coverage, and premiums suitable for your business.

This prevents over and underinsuring, both of which will cause severe financial problems for you later.

4. Knowing about your coverage allows you to respond calmly to accidents

The last thing you want is not knowing what to do when an incident occurs.

Knowing about the different coverages and being aware of which ones your insurance plan has, gives you a sense of security and allows you to more calmly respond to situations.

Common Coverage for Commercial Tow Truck Insurance

There are many types of coverage available when choosing a commercial tow truck insurance plan. Check out the most common types below, so you can decide which ones you truly need!

Liability Coverage

Commercial tow truck insurance should at least include liability coverage, as this is the most basic type required of any vehicle.

Liability coverage protects others from your negligence. When you cause an injury to someone else or damage someone else’s property, this coverage pays for the damages within your limit.

On-Hook Coverage

As tow trucks transport another vehicle for business, they need on-hook coverage, a type of insurance coverage that protects the customer’s vehicle against potential damages.

Not to be confused with medical coverage or cargo coverage, on-hook coverage only protects the vehicle. What happens to the passenger if they ride along and any of their belongings that happen to be inside the vehicle are not covered.

Medical Coverage

Anything can happen when you’re on the road. Whilst liability coverage covers medical expenses of other parties injured because of you, they do not protect you or any other passenger with you.

Medical coverage in commercial tow truck insurance ensures that should your driver or any other passenger in your truck or the towed vehicle be injured, your medical fees will be paid for.

Uninsured or Underinsured Motorist Coverage

This coverage protects tow trucks against uninsured or underinsured motorists if you encounter an incident where they are involved.

If the other party is at fault, and they can’t pay for your damages, then your coverage will take care of your medical fees and vehicular damages. Sometimes, this coverage even extends towards the uninsured or underinsured party.