Towing can be a risky business to get into. So, whether you’re starting up your own Atlanta tow truck business or you’ve been in business for a while, you want to make sure that you’re properly insured. However, a lot more goes into insuring tow trucks than covering your drivers and your towing hook. So, here’s a rundown of the major types of insurance coverage you’ll need for a tow truck.
What insurance coverages do I need to tow cars in Atlanta?
Auto Liability Insurance
The auto liability portion of your tow truck insurance is a vital part of what protects your business in an accident. Auto liability insurance is usually broken up into two parts: Bodily injury liability and property damage liability.
The bodily injury portion of this coverage can help you cover the medical bills of another driver if you’re in a wreck. It can also help you pay the legal fees that come along with the accident if the other driver decides to sue. The property damage portion of auto liability can help you pay for the cost of repairs or the cost to replace the other driver’s car.
In the state of Georgia, all tow trucks are required to have:
- A $100,000 coverage limit per person for bodily injury or death
- A $300,000 limit per accident for each person injured or killed in an accident, and
- $50,000 in property damage coverage per accident.
Although these are the minimum limits for tow truck auto liability in Georgia, your towing contracts may have different coverage requirements. So, be sure to check with the people you’re contracted with and tell your agent about these limits when getting insurance quotes for your business.
It’s very important to note, though, that auto liability for tow trucks only covers the damage done to the other vehicle. So, what do you do if your tow truck is damaged in an accident?
Physical Damage Insurance
Physical damage insurance is the part of your coverage that can help you cover repair and replacement costs for your tow trucks. This type of insurance is also usually broken up into two parts: collision and comprehensive coverage.
Collision coverage for tow trucks can help you cover the costs of repairing your truck specifically if you’re involved in an accident. Comprehensive coverage can help you handle expenses from basically every other incident that could befall your tow trucks, including: fire, vandalism, theft, lightning, hitting an animal, hitting an object (like a tree or building), and more.
Regardless of the type of towing contract you have, if something happens to a client’s car, you could be held liable for the damages. Auto liability and physical damage coverage won’t help you cover that kind of risk. That’s what on-hook-in-tow coverage is for.
Let’s say that you’re driving to your yard with a client’s vehicle and it’s raining hard. Something happens and your tow truck loses traction. The truck itself and the driver are safe, but the client’s car got tossed in the chaos and has severe damage. You could be held liable for these damages, but your on-hook/in-tow coverage can help you cover the cost of the car’s damages.
Again, our insurance agents will be able to take into account the minimum requirements that Georgia has for on-hook/in-tow insurance, the minimum requirements of your towing contracts, and how much coverage you actually need for your business when you call in to get your quotes.
Garagekeepers insurance can help you cover your clients’ cars while they’re in your care, custody, and control – for example if they’re on your premises. Garagekeepers will generally help you cover the cost of damage to a customer’s car due to:
- And more depending on your specific policy
For example, if one of the cars in your yard has been tagged with spray paint overnight, your tow truck business’s garagekeepers insurance can help you cover the costs of painting over the damage to the customer’s car. Any tow truck operator in GA must have at least $50,000 in garagekeepers coverage limits, which covers the amount of the stored vehicles and their contents.
Garage Liability insurance
Garage liability coverage, however, is important because it can help you cover the costs of any liability issues that come about because of the services you provide. Similarly to auto liability coverage, this part of your tow truck insurance can help you cover the costs of any property damage or bodily injury that happens because of the services you’ve provided.
For example: Let’s say that you provide roadside assistance, and you’re called in to help a customer change a tire. You drive out to them, change the tire, then the driver thanks you and drives off. However, a few miles down the road, the tire comes off, which results in an accident. You could be held liable for the entire accident since you changed the tire.
However, your garage liability insurance can help you cover the costs of repairing the cars involved in the accident and the legal fees if any of the drivers decide to sue you. This coverage would be different from your auto liability coverage since the accident did not involve your truck.
In the state of GA, all tow truck operators must have at least a $50,000 coverage limit for their garage liability insurance. Keep in mind that these are only the minimum requirements for garagekeepers and garage liability insurance in Georgia. Depending on the factors of your specific business, such as the type of cars you handle, the size of your business, and your towing radius, you may need more coverage. (But that doesn’t have to mean that your coverage will be more expensive – especially when you work with our agents to find quotes.)
Wrongful repo insurance
If your tow truck business also handles the repossession of vehicles, you’ll need a type of coverage that can protect you against human error. Tons of things can go wrong when repossessing a vehicle (besides a few angry customers):
- You may not have checked with the bank before you picked the car up. The person may have already made their payment and the bank was a bit delayed in relaying this information to you. Wrongful repo insurance may cover the costs of any legal fees that happen because of the misunderstanding. However, to avoid this mishap, make sure you check with the bank before you leave to tow the car.
- There was no written notice to you or the customer about the repo. A spoken agreement between you and the bank is not enough to tow the car. So, make sure you have written consent.
- You could just take the wrong car. Accidents happen, but this oops could have very dire consequences for your business if you don’t have the right coverage.
These may seem like a lot of coverages to have for a tow truck business, but they’re vital for keeping you, your drivers, and your business safe and out of a major financial pickle. It can be tough to look for all of these types of insurance by yourself and get the right amount of coverage for your particular towing business and tow trucks.
That’s why our insurance experts are here to help. Call us at 404.352.0304, fill out our online form, or chat with us to find out why we have a 9.8/10 review on TrustPilot after helping tons of towing companies get the Atlanta tow truck insurance they need.