Tow truck insurance

What federal law says about towing

• Emergency tows. Unless the Secretary of Transportation finds it necessary, the federal motor carrier jurisdiction that covers registration and operating authority does not extend to “the emergency towing of an accidentally wrecked or disabled motor vehicle” (49 U.S.C. 13506(b)(3)).
• Non-consent tows. Federal law generally stops states from regulating motor carriers’ prices, routes and services, but not state and local rules on tow truck operations performed without the prior consent or authorization of the vehicle’s owner or operator (49 U.S.C. 14501(c)(2)(C)). States also keep their authority over safety and over minimum insurance (14501(c)(2)(A)).
• Safety rules. A tow truck rated or weighing 10,001 lbs or more that operates in interstate commerce is a commercial motor vehicle: USDOT number, DOT medical certificate for drivers and FMCSA safety rules (49 CFR 390.5, 391.41).

Hauling vehicles for pay across state lines outside that emergency exemption falls under the general rules for for-hire freight — see the car hauler guide.

State rules: examples from our state guides

Texas (TDLR)

Per truck, per incident: incident management towing $500,000 liability plus $50,000 “cargo or cargo on hook”; private property towing $300,000 plus $50,000; consent towing $300,000. Certificates must promise TDLR 30 days’ notice before cancellation.

New York

A tow truck’s liability policy needs a combined single limit of at least $300,000, plus $25,000 for damage to a vehicle in the insured’s care, custody and control (VTL §311).

New Jersey

To register a tow truck: a certificate of insurance for at least $750,000 for trucks under 32,000 lbs, or $1,000,000 for heavy-duty tow trucks over 32,000 lbs, with the MVC as certificate holder.

Georgia

Non-consent towing needs a DPS permit ($300 a year) and $100,000 / $300,000 / $50,000 on every vehicle used in intrastate commerce, plus garage keeper’s legal liability of at least $50,000 on the storage lot.

Illinois

Police-ordered tows, owner-requested tows and emergency tows of wrecked or disabled vehicles are exempt from the ICC’s public carrier certificate; after an emergency tow, further moves to another repair or storage place are not exempt.

Tennessee

The Department of Revenue’s intrastate authority covers private towing and wrecker services as well as for-hire carriers.

Cities and counties may regulate non-consent towing too (49 U.S.C. 14501(c)(2)(C)) — check the local rules where you work.

The coverage a towing business is built on

• Auto liability — at least the state or local minimum for your permit type, and higher if a contract requires it.
• On-hook (cargo) coverage — for the vehicle you are towing or carrying. Texas calls it “cargo or cargo on hook” and requires $50,000 for incident management and private property tows.
• Garage keepers legal liability — for customers’ vehicles stored on your lot. Georgia requires at least $50,000 for non-consent tow storage.
• Physical damage — for the wrecker or rollback itself; a lender with a lien will require it.
• General liability and workers’ compensation — for claims away from the road and for employees, under your state’s law.

Quote checklist for a tow company

• Your state and local permits or licenses, and the permit type for each truck (consent, private property, police or incident management).
• For each truck: VIN, year, make, model, GVWR, and whether it is a wrecker, rollback or heavy-duty unit.
• Where you store towed vehicles, how many at a time and their typical value.
• Drivers’ license details and years of experience.
• Loss runs from recent insurers.