How Much Is Tow Truck Insurance Per Month - 2025

Selecting tow truck Insurance is essential for operators who need robust coverage against liability, vehicle damage, and business risks; if you’re asking “how much is tow truck insurance per month,” it’s important to understand that rates can vary significantly based on your state, type of operation, claims history, truck value, and required policy limits.

Who This Policy Is For & Eligibility

Tow truck insurance is designed for businesses or individuals operating vehicles equipped for towing—whether roadside service providers, repo operators, auto shops, or commercial towers working with private or public contracts.
Eligibility generally requires a valid commercial driver’s license (CDL) for the operator and the proper registration (commercial plates) for each towing vehicle.
Risks covered typically include liability (bodily injury and property damage), physical damage to owned vehicles (collision and comprehensive coverage), on-hook/cargo insurance, and garage keeper’s liability.
Firms with a history of claims, newer businesses, or those operating in areas with higher accident rates may face steeper premiums or stricter underwriting. States may also impose requirements or minimum limits specifically for towers; verify minimums on your state insurance department (official homepage).
Certain endorsements, like uninsured/underinsured motorist (UM/UIM), are sometimes mandatory and may impact overall cost.

Key Facts (At-a-Glance)

Item	Details
Coverage Types	Liability (BI/PD), medical payments (PIP/MedPay), collision, comprehensive, on-hook cargo, garagekeepers liability, endorsements/riders for specialized risks.
Premium (Monthly/Annual)	Sample/illustrative range: Approximately $750–$1,250 per month, or $9,000–$15,000 per year per truck for full coverage (as of most recent industry surveys).
Deductible	Varies by insurer; commonly $500–$2,500 per claim (collision or comprehensive selected by policyholder).
Liability Limits	Minimum state requirements apply; higher limits recommended for business contracts—common limits are $1 million or more for total liability.
Physical Damage	Coverage for theft, collision, vandalism, weather; required by lenders if truck is financed/leased.
On-Hook/In-Tow Coverage	Protects customer vehicles being towed from physical damage (usually required by contract partners or states for towers).
Garagekeepers Liability	Covers vehicles held on your premises for storage or repair; separate limits and deductibles apply.
Claims	Report promptly; evidence, driver logs, and police reports are often required due to claims complexity.
Endorsements/Riders	Options for hired/non-owned vehicles, rental reimbursement, employee dishonesty, cyber liability.
Exclusions	Deliberate acts, illegal towing, mechanical breakdown (unless endorsed), racing, unlisted driver operations.

Pros

Meets state and contractual insurance mandates for tow operations.
Covers liability from bodily injury, property damage, and legal defense costs after covered accidents.
Options for comprehensive protection of both owned tow trucks and customer vehicles in transit or on premises.
Higher liability and physical damage limits can protect against catastrophic claims or lawsuits.
Many policies offer flexible endorsements to match unique business needs (e.g. repo, police rotation, auto transport).

Cons

Monthly premiums are substantially higher than for private passenger vehicles; even basic liability can cost several hundred dollars per month, with full coverage policies routinely at $750+ monthly per truck.
High deductibles may apply, especially for physical damage or garagekeepers claims.
Startups and drivers with poor safety records often face the highest rates, and some carriers restrict new ventures or specific tow operations (e.g., repossession, long-haul recovery).
Exclusions are common: policy may not cover mechanical breakdown, towing of unlisted vehicles, or certain non-road risks without special endorsements.
Claims involving injury or damage to towed vehicles can be complex and slow to resolve due to layered coverage and liability disputes.

Costs & How Pricing Works

Premium is influenced by location (states with higher accident/theft rates are costlier), value/class of tow truck(s), mileage, and the type of towing performed (private party, police rotation, emergency roadside, or repossession).
Businesses with more trucks may receive volume discounts but usually pay on a per-vehicle basis; those pulling high-value, specialty, or multiple vehicles may pay higher rates.
Common sample/illustrative annual premiums: $9,000–$15,000 per truck, which translates to $750–$1,250/month; for smaller fleets or newer businesses, rates can exceed this range, particularly in risky ZIP codes.
Selecting lower liability limits or higher deductibles may reduce costs but increase financial exposure per claim.
Experience, safety record, driver age, and loss history are key underwriting factors. Many underwriters require MVR (motor vehicle record) checks and annual fleet telematics/performance reviews.
Physical damage (collision/comprehensive), uninsured/underinsured motorist, and cargo/in-tow coverage are common riders that add to the premium.
Some states require proof of insurance filings (BMC-91X, SR-22) which may carry additional fees or filing surcharges.

Covered Services & Exclusions

Standard coverage: liability for property damage and bodily injury caused by tow truck operation; physical damage (collision, theft, fire, vandalism); on-hook/cargo (damage to vehicles towed, not standard “cargo”); medical payments (personal injury protection, “MedPay” or PIP in some states); and garagekeepers liability for stored vehicles at owned/operated lots.
Exclusions typically include intentional/illegal acts, loss of income from downtime (unless extra coverage purchased), mechanical failures unrelated to accidents, and damage caused while operating outside the policy’s declared radius of operation.
Many policies exclude towing for certain work types (e.g., heavy-duty towing, hazmat, long-haul) without explicit endorsement. Carefully review policy declarations and exclusions for details.

Claims & Repair Process

Notify insurer promptly after any accident, theft, or damage (immediate reporting often required in underwriting agreement).
Provide supporting evidence: accident report, driver logs, photos, client delivery or dispatch documentation, and police report if necessary.
An adjuster will inspect the damaged tow truck (and in-tow vehicle if covered); estimates are used to calculate repair/replacement or actual cash value payout (minus deductible).
Claims involving on-hook, towing, or garagekeeper’s liability may require proof the vehicle was in your care, custody, or control at the time of loss.
Disputes—such as tort/lawsuit liability, excluded claims, or out-of-network repairs—can trigger detailed review and sometimes legal defense under the policy.
Insurers may offer emergency rental reimbursement for downtime (when covered), but limits apply.

State Rules & Minimums

Every state sets minimum liability coverage for commercial tow trucks; these normally exceed limits for personal autos.
Typical minimums: $300,000–$500,000 combined single limit (CSL) per occurrence; higher in states with dense urban or highway operation, and for interstate commerce.
On-hook/in-tow minimums can be mandated by contract or local/state rules—verify on your state insurance department (official homepage).
Certain states (e.g., those requiring PIP or MedPay, or those regulating storage/impound lots) may require additional coverages or surety bonds.
Federal Motor Carrier Safety Administration (FMCSA) has additional guidelines for interstate towers and those handling hazardous cargo—consult with FMCSA for up-to-date rules if operating across state lines.

Quotes & Cost Drivers

Number of trucks and total insured value (replacement cost vs actual cash value for each vehicle).
Driver history (MVR, commercial driving experience, accident record, prior insurance claims).
Types of towing services (e.g., emergency roadside, repo, long-distance, heavy-duty) and operational territory.
Owner/operator business experience and years in operation.
Coverage limits and deductible choices—higher limits/higher-value trucks always bring higher premiums.
Discount eligibility: defensive driving courses, fleet telematics, claims-free periods, or policy bundling (when available).

Coverage Optimizer Checklist

Prioritize mandatory coverage for state, lender, and contractual compliance (liability, on-hook/cargo, physical damage on financed trucks).
Check for sublimits or gaps—confirm riders on repo, police impound, or long-haul operations if applicable.
Review liability limits for adequacy considering business assets and litigation risks.
Consider higher deductibles only if business can absorb higher per-claim outlays.
Reassess coverage annually or after adding/replacing trucks or expanding service area.

Alternatives & Comparisons

Side-by-Side Comparison

Feature	Basic Liability Only	Mid-tier w/ Physical Damage	Full Coverage w/ Riders
Coverage Scope	Bodily injury, property damage only	Liability plus collision, comprehensive	Liability, physical damage, on-hook, garagekeepers, additional endorsements
Typical Premium (Monthly)	$500–$800 (sample)	$800–$1,100 (sample)	$1,100–$1,500+ (sample)
Deductible	$2,500+ (sample)	$1,000–$2,500 (sample)	$500–$2,000 (sample)
Exclusions	No in-tow, garagekeeper’s, or physical damage	No on-hook/cargo, some towing types excluded	Most risks covered; fewer but stricter reporting duties
Claims Process	Simpler, but limited payout	Moderate; usually requires repair estimates and loss evidence	Complex; may involve disputes and layered coverage

Premiums are “sample/illustrative”—actual rates depend on risk profile.
Always confirm current-year requirements and offerings with your state authority or regulator.

Important

This content is for educational purposes only. It is not insurance, legal, or tax advice.
Premiums, rules, and eligibility vary by state, insurer, and year. Verify key details from your state insurance department (official homepage).

Frequently Asked Questions

How much does basic tow truck insurance cost each month?

For a single vehicle with minimum required liability, “sample/illustrative” rates start around $500–$800/month (as of recent surveys).
Higher limits, vehicles, or services add to the cost.

What coverages are mandatory for tow truck operators?

Liability is always required; physical damage and on-hook/in-tow may be required by lenders or contracts.
Check with your state insurance department for specific local mandates.

Does my policy cover the cars I am towing?

Not by default; you’ll need on-hook or cargo coverage for physical damage to towed vehicles.
Garagekeepers liability covers storage, not in-transit damage.

Can I lower my premiums as a new tow truck business?

Options include higher deductibles, limiting territory, maintaining a clean claims/driving record, and choosing lower-value vehicles.
However, newer ventures often pay the highest rates regardless.

Where can I find official requirements for tow truck insurance in my state?

Visit your state insurance department (official homepage) for up-to-date rules, filings, and complaint resources.

Conclusion & Next Steps

Tow truck insurance is a significant expense—often $750–$1,250 per truck monthly for well-insured operators, and even more for high-risk or new ventures. These are “sample/illustrative” based on recent data and may fluctuate widely by state, business type, and claim history.
Carefully assess your risk, confirm minimum coverage requirements, shop for multiple quotes, and review coverage against actual fleet operations annually or after changing services.
To understand current mandates, complaint resources, or coverage questions, refer to your state insurance department (official homepage) and the National Association of Insurance Commissioners for guidance.