On-Hook Towing Insurance – When it comes to handling other people’s vehicles while working in the towing and roadside assistance industry, it involves a lot of responsibilities and comes with some serious risks.
Whether you’re towing a car from the scene of an accident or transporting a breakdown to the repair shop, you’re liable for any damage that may occur while the vehicle is in your care.
This is where having an on-hook towing insurance becomes a essential necessity. This specialized insurance coverage protects your business from financial loss if a customer’s vehicle is damaged while being towed.
On-hook towing insurance is particularly important for businesses that operate tow trucks or provide roadside services. Without it, you could face substantial out-of-pocket expenses in the event of an accident, fire, theft, or other unexpected incidents during the towing process.
What is On-Hook Towing Insurance?
On-hook towing insurance is a type of commercial auto insurance coverage that protects customer vehicles while they are being towed by your company.
It applies when a vehicle is physically “on-hook” being attached to your tow truck by chains, straps, or winches and is in your temporary custody.
What’s more, this coverage is different from your general liability or regular auto insurance policy. The general liability may protect you from injuries or property damage your business causes, but it does not cover damage to vehicles you tow.
On-hook insurance fills that gap by covering losses that happen while you’re actively towing someone else’s car.
What Are Situations Covered By The On-Towing Insurance?
Here are some of the key events covered under the On-Hook towing Insurance:
- Collision damage while the vehicle is being towed
- Theft or vandalism of the towed vehicle
- Fire or explosion during transport
- Damage caused by improper towing equipment failure
- Accidental damage while loading or unloading the vehicle
Who Needs On-Hook Towing Insurance?
Any business that is involved in the towing or roadside service industry should seriously consider getting the on-hook coverage. Even the most skilled operators can experience accidents or mechanical failures.
Without the proper protection, a single incident could lead to lawsuits or thousands of dollars in vehicle repair or replacement costs.
So, this coverage is particularly critical for:
- Towing companies
- Salvage or repossession companies
- Roadside assistance providers
- Auto repair shops with towing services
If your business handles customer vehicles using a tow truck, even occasionally, you likely need this insurance. Some states may also legally require it as part of your commercial towing license.
What Does The Insurance Cover and Exclude?
While on-hook towing insurance offers valuable protection, it’s important to understand the scope of coverage and the common exclusions that apply. Here are the issues the insurance model covers:
- Collision Damage: If the towed vehicle is involved in an accident.
- Accidental Loading Damage: Occurs while loading or unloading.
- Theft: Covers if the vehicle is stolen while hooked to your truck.
- Vandalism: Protects against intentional damage by third parties.
- Fire and Explosion: Damage resulting from fire during transport.
What It Doesn’t Cover:
- Intentional or criminal acts by your staff
- Mechanical failure unrelated to towing activity
- Damage to your tow truck or equipment
- Vehicles stored at your lot
To get the best protection, many towing businesses pair on-hook insurance with garagekeepers legal liability, general liability, and commercial auto coverage.
How Much Does On-Hook Towing Insurance Cost?
The actual cost you get depends on multiple business-specific factors. Let’s look at some of the factors that affect the cost of the On-hook insurance:
- Coverage Limits: Higher limits mean higher premiums.
- Type of Tow Trucks: Larger or more expensive vehicles cost more to insure.
- Driving History: A clean record lowers your premium.
- Business Location: Areas with high accident rates or theft risk cost more.
- Years in Business: Established companies may receive better rates.
Usually premiums can range from $1,000 to $3,000 per year per vehicle, depending on the above factors and your insurance provider.
Frequently Asked Questions
Is On-Hook Towing Insurance Required By Law?
In some states, on-hook towing insurance is required for commercial towing operations to be licensed or legally operate. Even in states where it’s not mandated, many contracts and clients require proof of this coverage.
How Is On-Hook Towing Insurance Different From Garage Keepers Insurance?
The On-hook insurance covers vehicles while they are being towed, whereas garagekeepers insurance covers vehicles stored or being serviced on your property. Many towing companies need both.
Does This Insurance Cover My Own Tow Truck?
No, it doesn’t. On-hook insurance covers the vehicle being towed, not your tow truck. Damage to your tow truck would fall under your commercial auto insurance.