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Tow Truck Insurance
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Buying insurance can be difficult; the concept can be difficult to understand for first-timers, and for those looking for insurance on unique types of coverage policies, the relevant information may not always be easily available. However, it is always important to know the policy in detail: how it works, how much it covers, how much it costs, and the like. Such policies might be totally exclusive in and of itself, or they could be a small sub-category of a bigger class of policies. For example, tow truck insurance is a minor sub-category of vehicle insurance. Information on motor insurance is readily available but may be limited to information on personal automobiles rather than industrial vehicles, as the former are much more common than the latter. We aim to alleviate the trouble that tow truck drivers and trucking companies have in finding the appropriate information for their vehicles. Everything you need to know about tow truck insurance will be summarized below.
Tow trucks are trucks designed specifically for the purpose of transporting a car or another vehicle to another location. The reasons may be to tow a damaged car incapable of driving on its own to a repair shop, or for removing illegally parked cars from streets. They may seem big and sturdy, but in ways they are more susceptible to accidents than normal personal automobiles. One obvious difference is how much more capable a tow truck is of causing damage to other people and property than a much smaller commercial car. Other than that, tow trucks contain components that cars do not, such as a boom arm, a chain and hook, a wheel-lift, or a flatbed which is a simple flat platform atop where a vehicle can be place. Additional components lead to additional possibilities of breakdowns and malfunctions. These and other additional factors make tow truck insurance policies far more expensive than automobile insurance.
How Truck Insurance Premiums Are Determined
There are a number of factors that determine the price of truck insurance premiums. Some are dependent on the driver, others on the truck itself. Factors include:
- Truck driving experience of the driver; the more experienced a driver, the less likely he is to be involved in accidents, therefore insurance rates go down as experience increases. The driver's accident record is also taken into consideration; the lesser amount of accidents he has been involved in, the lower his insurance rates. In fact, if a driver has been involved in one too many accidents, insurance companies may completely refuse to provide premiums.
- Also taken into consideration is a driver's employment history: if he has been employed to the same company for a long time, this may reflect his good driving skills as well as familiarity with the company's equipment and trucking routes, decreasing the risk of accidents and thus decreasing insurance rates.
- Age of driver; based on studies, middle-aged drivers (around 30-65 years of age) tend to drive safer than very young and very old drivers, thus insurance rates will be higher for those aged young and old.
- Number of drivers associated with the truck; most trucking companies will have one truck operated by more than one driver to maximize usage of the truck. Generally, the more drivers you have operating a truck, the higher the insurance rates, as it becomes more likely for the truck to be involved in an accident.
- Insurance history of the truck; if the truck has been previously insured by a different company, your new insurance company may ask why you are making a change. If the reason is based on cancellation due to not paying premiums or other negative reasons, your insurance rates may increase.
- Length of time the policy owner has been operating; the older a company is, the more settled-in they are in their field of business. A newly operating trucking company may have other problems that can increase the possibilities of accidents, such as poor management.
- Area in which the truck will be driven; if the area poses any threats such as proneness to natural disasters or poor road conditions, insurance rates may increase.
- Condition of truck; the poorer the condition of the truck, the more likely it will be damaged, and thus the higher the insurance rates become.
Components Of Tow Truck Insurance Premiums
There are multiple components to tow truck insurance. The most basic component is probably the liability insurance. This is what most people assume vehicle insurance to be: coverage for injuries and damage to physical property. In case of an accident, liability insurance will pay for the expenses of any bodily injury caused to yourself or to others including medical bills, rehab, lost income during hospitalization, pain and suffering, and funeral expenses, and any physical damage to property whether it be other vehicles involved in the accident, or other property (houses, traffic lights, etc) that were damaged in the accident. Liability insurance will cover damages caused by your tow truck as well as damages caused by the vehicle you were towing at the time of the accident. It may even cover for legal expenses in the case that you are sued for the accident. Of course, the extent of the expenses to which the liability insurance will cover for depends on how much you pay for the premium, which is dependent upon its limits. A limit is how much maximum money an insurance premium will pay for, and will apply to all of the following components as well.
The next main component is physical damage coverage, which will cover damages to your own tow truck. Physical damage coverage includes collision insurance and comprehensive insurance. Collision insurance, as the name suggests, covers for damages caused by a collision of your tow truck into another vehicle or other objects. Comprehensive insurance will cover for physical damage caused by accidents other than collisions, such as fires or storms, and also covers costs if your tow truck is stolen.
An insurance premium component unique to tow trucks is the on-hook towing insurance. This policy will protect the vehicle which is being towed, in case the tow truck is involved in an accident while towing it and the vehicle becomes damaged. The policy covers damage caused by natural causes, accidents, or theft.
Another policy unique to tow trucks is the garagekeepers legal liability insurance. It is similar to the on-hook towing insurance in terms that it provides protection for the car being towed, except the garagekeepers legal liability insurance provides coverage for a towed vehicle while it is parked at a storage location such as a garage. In the case that a towed vehicle being stored is damaged by natural causes or stolen by thieves, the policy will cover for the expenses.Uninsured motorist insurance is an optional component of tow truck insurance. In the case that you are involved in an accident caused by a driver who is not covered or sufficiently covered by insurance to cover the costs of the damages, the uninsured motorist insurance can cover the damages caused to you and your property.
Non-trucking liability insurance is another optional component. If your tow truck is involved in an accident while it is off-duty, then non-trucking liability insurance can cover costs of these accidents that normal liability insurance may not cover as the accidents were not related to trucking purposes.
For companies operating towing trucks such as roadside service providers and auto repair shops, they may want to consider fleet coverage versus single truck coverage. Most insurance companies will provide a discount for fleet coverage policies while providing the same insurance as a single truck coverage would provide.
Buying Your Tow Truck Insurance
When coming to buy your tow truck insurance, there are several things to consider other than what determines your insurance premium rates and what type of policies there are to purchase. First of all, you should be aware of the benefits of being insured. Each policy has different benefits, and the benefits depend on the limit that you set. Know how much coverage your insurance policy provides. Next, control whatever rate-determining factor that you can. Some factors are impossible to control, such as how hazardous the area in which you operate is. Others can be monitored to an extent, such as how experienced your drivers are. It may be more expensive to hire experienced drivers, but the payoff could come in the form of lower insurance premium rates. Finally, always get quotes from established and trusted companies. Lower rates may be available from smaller and newer insurance firms, but their lack of experience could come at a cost to your company in case of an accident. Established companies will be able to provide you with a higher level of assurance and confidence, even if it means at a higher dollar price. Don't let price be the sole determining factor in which policy you purchase; keep in mind that insuring a tow truck is in essence insuring two vehicles, the tow truck itself and the vehicle being towed.
Available Tow Truck Insurance Coverages by State
The links above do not represent all coverages available in each state or a full discription of services we offer. They are intended to only give an example of some of the coverages we offer.