Does Liability Insurance Cover Towing?

Towing operators carry real risk every time a customer's vehicle is hooked up or sitting on the lot. Many operators assume their commercial auto liability covers it all. It does not. Knowing exactly what liability covers, and where on-hook and garagekeepers coverage fill the gap, is what keeps one bad day from becoming an uncovered loss.

What Does Liability Insurance Actually Cover?

Commercial auto liability insurance pays for bodily injury and property damage you cause to other people while operating your tow truck. If you rear-end another car or your driver injures a bystander, liability responds. What it does not do is pay for damage to the vehicle you are towing or storing, because that vehicle is in your care, custody, and control.

Where Liability Leaves a Gap for Tow Operators

The vehicles you tow are not yours, but you are responsible for them. If a car is damaged while on the hook, during loading, or sitting in your lot, a liability policy will not pay. That exposure is covered by two specialty coverages built for towing: on-hook coverage and garagekeepers coverage.

On-Hook Towing Coverage

On-hook coverage protects a customer's vehicle while it is being winched, loaded, or transported. If the vehicle is damaged in transit by fire, collision, or theft while connected to your truck, on-hook coverage pays up to your limit. Limits should reflect the value of the most expensive vehicles you realistically tow.

Garagekeepers Coverage

Garagekeepers coverage protects vehicles stored on your premises or impound lot from fire, theft, vandalism, and collision. If you keep towed or impounded vehicles overnight, this coverage is essential, since a single lot fire could otherwise leave you paying for every car out of pocket.

How Much Towing Coverage Do You Need?

The right limits depend on the vehicles you handle and how many you store at once. A repo operator moving newer trucks needs higher on-hook limits than a roadside operator towing economy cars. Because pricing and limits vary widely between carriers, the only way to right-size coverage is to compare quotes from insurers that specialize in towing.

Work With Pro Insurance Group

Pro Insurance Group is an independent insurance broker based in Elgin, IL, serving clients across Illinois and 40+ states. Because we shop 20+ A-rated carriers, we put the whole market to work on your rate, and we re-shop every renewal so your premium never quietly creeps up. No agency fees, ever.

Get My Free Towing Quote

Prefer to talk it through? Call 833-776-4671 or text "quoteme" to 312-878-9416.

Frequently asked questions