Tow Truck Insurance: What Every Tow Operator Needs to Know
If you’re a tow truck driver or business owner, you already know that finding affordable and reliable insurance can feel nearly impossible. You might even have heard other insurance agents say: “There are over 10,000 insurance companies in the U.S., but only a few that will insure tow trucks.”
It’s true—tow truck insurance is one of the toughest commercial auto lines to write, and the options are limited. Whether you’re just starting out with one truck or managing a fleet of 50+, knowing your options can make all the difference in finding the coverage you need without breaking the bank.
Top Insurance Companies for Tow Truck Businesses
Let’s break this down by business size and situation—starting with new ventures and working our way up to larger fleets.
🔹 For New Ventures or One-Truck Operations
If you’re just getting started with your first truck, your primary insurance options are:
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BHHC
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Progressive
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Prime Insurance
Berkshire Hathaway (Preferred for New Ventures)
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Excellent rates for startups and small fleets.
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Offers auto liability, physical damage, and on-hook coverage.
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Will write repossession operations, which many other carriers will not.
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Fast policy servicing and competitive rates—especially in the Midwest.
💬 Example: A South Dakota tow truck owner switched from Progressive at $13,000/year to Berkshire at $4,500/year for the same coverage.
Progressive
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Nationwide availability.
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Typically more expensive than Berkshire.
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More restrictive on repossession operations.
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Great if you don’t qualify elsewhere due to minor claims or driving history.
Prime Insurance
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Last resort for new ventures with major claims, tickets, or riskier operations.
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Can be expensive (e.g., $20,000/year for one truck).
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But they will take risks others won’t, including repossession-heavy contracts.
🔹 For Growing Fleets (2–15 Trucks)
If your business is growing, you have more options—but still not a lot.
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KBK Towing Program (underwritten by GUARD)
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Western National
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Arrowhead (uses AIG)
KBK Towing Program
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The most popular tow truck insurance option nationwide.
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KBK is a brokerage that manages a custom towing program using GUARD’s policy.
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Great for small to medium-sized fleets, including those with heavy-duty trucks and high on-hook values.
💬 Example: A 4-truck operator with $200,000 trucks and $250,000 on-hook coverage paid $38,000/year total with KBK—a fantastic deal for that level of protection.
Western National
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Regional carrier (primarily Midwest).
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Less common, but viable if your agent has access.
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Accepts larger fleets (e.g., 27 units seen in South Dakota).
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Not towing-focused, but competitive if you qualify.
Arrowhead (AIG-backed program)
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Uses AIG’s policy—a major insurance company.
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Requires full underwriting review—not a “quick quote.”
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Best for operators who can present a strong safety record and complete submission.
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Typically writes larger, well-run operations.
🔹 For Large Fleets (15+ Trucks)
You’ll want to look at:
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National Interstate
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KBK (still a great option)
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Arrowhead
National Interstate
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One of the most fleet-friendly tow truck insurers in the nation.
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Often prefers businesses with 15+ trucks and a clean loss history.
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Underwriting is relationship- and submission-based—you need a skilled agent who can tell your story well.
KBK
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Will write fleets up to 150 units—and often beat competitors on price and coverage.
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Very competitive across the board.
Must-Have Tow Truck Insurance Coverages
Tow truck businesses aren’t just buying a basic policy—they need a specific set of coverages to protect against their unique risks:
Auto Liability (Required)
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Covers bodily injury or property damage you cause while operating the truck.
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Think: you rear-end a car or cause a major pile-up on the highway.
Physical Damage
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Covers your own tow truck from accidents, theft, or weather damage.
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Important note: It pays out up to the stated value or actual value—whichever is lower. Don’t over- or under-value your truck.
On-Hook / In-Tow Coverage
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Covers the vehicle being towed.
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Needed if you’re hauling anything—from sedans to semis.
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Common limits: $50K, $100K, $250K+. Choose based on what you tow.
Garage Keepers
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Applies if you’re storing customer vehicles on your property (e.g., auto shop or yard).
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Covers those vehicles while in your care, custody, or control not while towing.
General Liability
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Covers non-driving exposures (e.g., customer injuries at your property, advertising injury, or negligent services).
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Much cheaper than auto liability, but still critical for full protection.
Workers’ Compensation
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Required in many states if you have employees.
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Covers injuries to your workers—even if they’re just in the truck.
Umbrella Insurance
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Increases your limits across auto, general liability, and workers comp (employer’s liability).
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Highly recommended for larger fleets or contracts requiring higher limits.
Final Thoughts: Why Tow Truck Insurance Is So Tough
There’s no sugar-coating it: tow truck insurance is a tough market. Most insurance companies won’t write it due to the high risk, claims frequency, and specialized coverage needs.
But with the right agent, and the right story, you can find great coverage—sometimes at a fraction of what others are paying.
At Nelson Insurance Agency, we specialize in commercial auto insurance, including:
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Tow trucks
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Heavy-duty wreckers
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Roadside service
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Junk car haulers
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Repossession operators
We know the market, we know what underwriters are looking for, and we know how to help you tell your story.
