Just like any other commercial business, tow business has its own share of risks. Here is some information on insurance options available in this field.
Tow truck business is becoming popular amongst entrepreneurs, who have some experience in transportation and auto business. However, it is a fact that it is not an easy business to start as the license requirements are very rigid, owing to the high risks associated with this business. You have to exercise patience and must raise some significant capital, before you are able to purchase a tow truck and the corresponding license. The cost of establishing this business can range anywhere between US$10,000 to US$200,000 depending on the type of truck you buy, the area where you will work, truck driver’s salary, and the type of operations you will carry out once you’re in business.
Commercial truck drivers, independent tow truck owners, auto repair shops, fleet motor carriers, auto shop owners, full service gas stations and similar other businesses focus most on getting a good tow truck insurance. The biggest concern for tow truck owners is generally the insurance cost, which is very high relative to the normal cost of insuring cars. The cost of insuring tow trucks depends on a large number of factors and there is no fixed price for tow truck insurance.
Why is it Important to Insure your Tow Truck?
It is a fact that tow truck business is very risky owing to the high stakes involved in it. Not only the life of driver involved in the truck operation is at risk, accidents or mishaps can lead to loss of significant money of the truck owner. Auto insurance, especially for tow trucks is important to avoid losses to the tune of hundreds of thousands of dollars. All tow truck business owners can’t deny the critical role that a good insurance policy can play in safeguarding the financial assets of the business in times of any tragic accident or loss.
Once the tow truck drivers pick up a vehicle to tow, it is the ultimate responsibility of the tow truck owner to ensure that the vehicle (and sometimes they’re very expensive ones) reaches to the repair facility without any damage. Any damage to the vehicle is directly blamed on the tow truck owner. Besides this, the risk of life of the driver and chances of damage to the tow truck are other threats in this business. Hence, ideally, it is a very wise and must follow step to get a proper tow truck insurance policy.
Insurance Cost for Tow Truck: Important Parameters
The bigger and expensive your tow truck is, more will be your insurance coverage. It is advisable to talk to at least 3-4 auto insurance companies, compare their insurance policies and then choose wisely. Referrals are the biggest help in searching for ideal insurance company. Networking with professionals in the same field and sharing your experiences and asking your queries can help you to get cheap tow truck insurance.
Remember that insuring tow trucks is mostly costlier than insuring our normal vehicles. This trend is usually due to numerous risks that tow trucks face while they are out there, on the roads and highways, doing their work. Besides that, the maintenance and repair of tow trucks is also expensive and hence the net insurance cost of tow trucks is usually very high.
It is important to consider the fact that the experience and past performance of your driver also determines the cost of insurance policies. If you employ a driver with good work experience and excellent records, the insurance companies may give you modest discounts in the insurance schemes. It is always a bright idea to visit the websites of numerous tow truck insurance companies and learn more about their business. For insurance quotes and prices, that are not very often mentioned on the websites, you can ring them up or you may even schedule an appointment with the insurance provider. It is good to be assisted with a lawyer while reading all terms and conditions of the insurance policies. You must take your time to read all clauses of the agreement carefully.
Insurance Options for Tow Trucks
There are several types of coverage in tow truck insurance, chief being fire & theft coverage and the bodily injury & property damage insurance. No matter which state you reside in, it is generally a law to get minimum insurance for property damage or for bodily injury. In case, a vehicle owner doesn’t consider these liabilities insurance seriously, there can be penalties imposed upon the vehicle owner that may include suspension of the license. Generally, you’ll find that it is not allowed to run a tow truck business without any suitable insurance policy. It is important to get a tow truck insurance especially if your truck operates in extreme weather conditions.
If you don’t insure your tow trucks for non-auto related accidents, like fire, you will be entitled to pay for these external damages. Similarly, there will be medial bill insurances in case the driver suffers injuries. Another common type of coverage is the uninsured/underinsured motorist insurance. Under this coverage, if the driver or vehicle owner causing the accident, doesn’t have sufficient money or insurance to pay you back the damage done, your insurance company will cover the cost.
Many times, some fraudulent insurance companies will try to fool you by presenting easier tow truck insurance requirements. That’s why you must always be cognizant of the fact that it is not so simple to get a tow truck license and even an insurance policy, as the auto companies test you on various criteria, before awarding license or an insurance policy. If you’re careful and aware in choosing a good insurance company, you’ll be able to negotiate on an economical two truck insurance deal and you can likewise make efforts to get the truck(s) insured.