The Ins and Outs of Tow Truck Insurance

Tow trucks and recovery vehicles have come to the rescue of so many people over the years. They can move motor vehicles that are impounded, improperly parked or incapacitated. If a car is involved in an accident on the highway, or it has broken down on a remote country road, a tow truck is the safest way to get it out of the way.

Tow truck operators clearly know how to protect us, but are they protecting themselves and their business? Can a tow truck be covered by insurance? Yes, they can!

Tow truck insurance (also known as car carrier insurance) is a specialised form of commercial truck insurance. Whether you run a fleet of car carrying trucks and trailers, or just drive one as your day job, it’s important to ensure you are adequately insured against all potential risks that could occur on and off the road.

So, if you think this applies to you, read on to find out why you should be signing up for tow truck insurance and what it includes…

What industries use Tow Trucks?

There are many different reasons why a company might offer towing services, but if they fall into an automotive, transportation or construction industry category, it’s most likely an essential part of their business.

Businesses that commonly use towing trucks include:
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• Roadside assistance companies
• Auto repair shops
• Auto club contractors
• Machinery & equipment transport services
• Salvage car auctioneers
• Carpark managers

A state–based roadside assistance agency like the RACV is the most recognisable example of a company that would regularly require the use of towing equipment, but it’s not the only one.

Mechanics can use them to move immobilised cars from the street to the shop, technical and trade workers and machinery movers often need them to ferry equipment between job sites, and salvage vehicle auction houses will have them to deliver purchases to their buyers.

Even some carpark operators have contracts with trucking companies that have tow trucks suitable for getting cars out of tight spaces.

Are there different types of Tow Trucks?

To the untrained eye, one tow truck may seem much like the other. But for those in the know, there are three ways to classify a commercial tow truck: light–duty, medium–duty and heavy–duty.

And to narrow it down even further, there are four main types of tow truck design:
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1. The flatbed or rollback tow truck
2. The hook and chain tow truck
3. The wheel lift tow truck
4. The integrated tow truck

Most commonly used for light to medium–duty jobs – like carrying passenger vehicles – is the flatbed truck (also know as a rollback tow truck). It features a large flatbed which can tilt down to the ground, so a car can be drive or dragged up onto the back and then secured for transport.

A hook and chain tow truck can come in with an array of different capabilities (light, medium and heavy–duty). Although they are not widely used anymore, they are compact, making them ideal for retrieving vehicles from tight spots and towing them short distances.

A wheel lift tow truck is similar. It hooks around the front or back type to start, but instead of using a chain, it has a hydraulic or pneumatic hoist to lift the vehicle up.

​Finally, an integrated tow truck is almost exclusively heavy–duty, meaning it’s designed to carry big rigs like other trucks, tractors, vans and buses.

Why would a Tow Truck need Insurance?

If you work in or for towing services, then you’re exposed to a range of risks in your day–to–day job, both on and off the roads.

A tow truck insurance policy will be custom designed to suit your business and protect you in the case of an accident or collision, theft or damage. Not only does it cover you and your truck, it also safeguards you against possible incidents concerning the vehicle or cargo you have been hired to tow.

Towing insurance is the easiest and smartest way you can defend yourself against lawsuits and accusations, and your business operations and finances won’t be impacted if an issue does arise.

What Insurance Solutions are there for Towing Trucks?

You may think that a basic car insurance or truck insurance policy will cover you, but it’s not quite enough. Towing involves a range of business activities, from providing roadside assistance, to carrying and delivering goods to and from other company premises.

This is where we here at B Insured Brokers come in.

Both our general insurance brokers and specific truck insurance brokers will be able to help you tailor make a policy to address your needs and concerns.

An comprehensive policy could be a combination of the following:
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• Truck Insurance – covers repairing or replacing your tow truck in the event of collision, fire, vandalism or theft
• Business Interruption Insurance – covers your loss of income whilst your vehicle is being repaired or replaced
• Hook Liability Insurance – covers the vehicle being towed whilst in the company’s care
• Motor Fleet Insurance – covers multiple trucks if you run a big business
• Marine Cargo Insurance – covers items not insured under hook liability, like machinery on the tray, if they get lost, stolen or damaged in transit
• Public Liability Insurance – covers you if you are liable to a third party that has sustained damage as a result of your activities. Will also cover legal defence costs
• Workers’ Compensation Insurance – covers employees who suffer a work–related injury or illness. It helps with medical expenses and lost wages
• Equipment and Tools Insurance – covers the valuable equipment and tools used by tow truck operators, like winches and chains

How much is Tow Truck Insurance?

Over the past few years, the average cost to insure a single tow truck in Australia was around $450 per month. On top of that, is a general liability policy (a mandatory requirement), which is approx. $100 – $150 per month.

That being said, there are a lot of factors that will determine the true cost, taking experience, risk and locations into account.

The main things insurance brokers need to consider are the following:
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• Age of the truck – old models are often worth less, and therefore cost less to insure
• Size of the truck – heavy–duty tow trucks cost more than light–duty trucks
• Whether the truck is camera–equipped or not – can you back up an insurance claim?
• Distance the truck drives – the less you travel, the less you pay
• The location where the truck is parked and driven – rates will be higher if your business is in an urban area with high amounts of traffic and frequent accidents
• Hours of operation – If your truck provides 24/7, emergency roadside assistance, premiums will be higher than if it only operated during normal business hours
• Business history – if you’re just starting out, you might pay more until you’ve been in operation long enough to establish a safe reputation
• Claims history of the owner – the more claims you’ve made, the more high risk you are deemed to insure, therefore, more expensive

Although cheap tow truck insurance can’t be guaranteed, you can lower your premiums as much as possible by also keeping your rig in good condition and maintaining a good driving record. 

​Contact us for more information and to get your tow truck insured with B Insured Brokers today!