Tow Truck Insurance | What Coverage Is Required by Law?
- Nate Jones, CPCU, ARM, CLCS, AU
- 6 days ago
- 2 min read
Operating a tow truck business comes with unique risks—from roadside accidents to damage while towing a vehicle. That’s why having the right insurance isn’t just smart—it’s the law. Whether you’re a single-truck operator or manage a fleet, understanding the legal insurance requirements is essential to keeping your business compliant and protected.
In this guide, we’ll break down the mandatory coverages for tow truck companies and explain how Wexford Insurance can help you meet those requirements with confidence.
Minimum Legal Insurance Requirements for Tow Trucks
Tow truck insurance is a specialized form of commercial auto insurance. While requirements vary by state, there are several types of coverage that are commonly mandated:
1. Auto Liability Insurance (Required in All States)
This is the most basic and legally required coverage for tow truck operators. It covers bodily injury and property damage caused to others in an accident involving your tow truck. State minimums vary, but most require at least $300,000 combined single limit (CSL). If you operate across state lines, federal law requires a minimum of $750,000 CSL for for-hire tow trucks with a gross vehicle weight rating (GVWR) of 10,000 pounds or more performing emergency moves in interstate commerce.1
2. On-Hook Towing Insurance (Required in Some States)
This coverage protects the vehicle being towed while it’s attached to your truck. It covers damage from collisions, fire, theft, or vandalism during transport.
Some states require this coverage if you tow customer vehicles regularly.
If you store customer vehicles on your property (e.g., in a lot or garage), this coverage protects those vehicles from damage due to fire, theft, vandalism, or collision. It’s often required for tow yards and impound lots.2
If your business has employees, most states require you to carry workers’ comp. It covers medical expenses and lost wages if an employee is injured on the job.
Optional but Recommended Coverages
Even if not required by law, these coverages are highly recommended to fully protect your business:
Physical Damage Coverage – Covers your own tow truck in case of collision, theft, or vandalism.
Uninsured/Underinsured Motorist Coverage – Protects you if you're hit by a driver with little or no insurance.
Medical Payments Coverage – Pays for medical expenses for you or your passengers after an accident.
Why Choose Wexford Insurance for Tow Truck Coverage?
At Wexford Insurance, we specialize in providing business insurance for transportation-related companies across the U.S., including tow truck operators. Whether you’re a new venture or a seasoned fleet owner, we help you find the right coverage to meet both legal requirements and your business needs.
We offer:
Tailored insurance packages for tow truck companies
Coverage for owner-operators and fleets
Competitive rates and flexible payment options
Expert support from agents who understand the towing industry
Stay Compliant. Stay Protected.
Don’t risk fines, lawsuits, or business interruptions. Contact Wexford Insurance today to get a customized quote for your tow truck insurance. We’ll help you meet all legal requirements and ensure your business is fully protected—on and off the road.
